Which of the Following Statements Is Correct for an Investment

question 70

Multiple Choice

Which of the following statements is correct for an investment proposal with a positive NPV?

• A) The discount rate exceeds the required rate of return.
• B) The IRR is greater than the required rate of return.
• C) Accepting the investment proposal has an uncertain effect on shareholders.
• D) The present value of the cash flow equals the cost of the investment.

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Definitions:

Judicial

Relating to the system of courts that interpret and apply the law in legal cases, or pertaining to judges and their activities.

Seventeenth Amendment

An amendment to the United States Constitution that established the direct election of U.S. Senators by the citizens of a state, rather than by state legislatures.

Direct Election

A method of choosing political officials where the voters directly cast ballots for the persons or political party that they desire to see elected.

Marbury v. Madison

A landmark Supreme Court case in 1803 that established the principle of judicial review, allowing courts to declare laws unconstitutional.