When the Net Present Value (NPV) of a Project Is

question 143

Multiple Choice

When the net present value (NPV) of a project is calculated based on the assumption that the after-tax cash inflows occur at the end of the year when they actually occur uniformly throughout each year, the NPV will:

• A) Not be in error.
• B) Be slightly overstated.
• C) Be unusable for actual decision-making.
• D) Be slightly understated but probably usable.
• E) Produce an error the direction of which is undeterminable.

---

Definitions:

Prefrontal Lobotomy

A surgical procedure once used to treat mental disorders, involving the removal or destruction of part of the prefrontal cortex of the brain.

Drug Therapy

The treatment of disease or disorder through the administration of pharmaceutical drugs.

Behavior Therapy

A type of psychotherapy that focuses on changing undesirable behaviors through conditioning and learning techniques.

Transference

In psychoanalysis, the process by which patients displace onto their analysts feelings and ideas which derive from previous figures in their lives.