The Net Present Value for a Project with a Relatively

question 36

Multiple Choice

The net present value for a project with a relatively long life is more sensitive to changes in the required rate of return than the net present value for a project with a relatively short life because:

• A)the internal rate of return is greater the longer the term of a project.
• B)interest is compounded over time.
• C)a change in the discount rate has a much greater impact on more distant cash flows.
• D)distant cash flows are more uncertain.

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Definitions:

Contaminants

Unwanted substances or impurities found within a product, sample, or environment that can affect performance or health.

Bleed Screw

A small valve or screw located on hydraulic systems, such as brakes, used to remove air from the system.

Relay Valve

A valve used in air brake systems that speeds up the application and release of brakes over long distances by shortening the response time.

Primary Circuit

The initial or main electrical circuit in a system, responsible for providing the primary flow of electricity or the initial path for the current.