In Regard to the NPV Method, Which of the Statements

question 14

Multiple Choice

In regard to the NPV method, which of the statements below is TRUE?

• A) In the NPV Model, if two projects are being compared, the one with the highest IRR is selected.
• B) In the NPV Model, the present cash flows are discounted at the rate r, the cost of capital.
• C) In the NPV Model, most future cash flows are stated in present value or current dollars and the inflow is "netted" against the outflow to see if the net amount is positive or negative.
• D) In the NPV Model, the net present value of an investment is the present value of all benefits (cash inflow) minus the present value of all costs (cash outflow) of the project.

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Definitions:

Operating Activities

The recurring operations of a business that pertain to providing its main goods or services and generate revenue.

Net Cash

The actual cash that is available with a company after all deductions, including expenses and liabilities, have been made.

Operating Activities

Business activities directly related to the production and delivery of goods and services.

Operating Activities

Activities related to the primary operations of a company, such as purchasing raw materials, producing goods, and selling products or services.