Which One of the Following Is True If the Managers

question 61

Multiple Choice

Which one of the following is true if the managers of a firm only accept projects that have a profitability index greater than 1.5?

• A) The firm should increase in value each time the firm accepts a new project.
• B) The firm is most likely steadily losing value.
• C) The price of the firm's stock should remain constant.
• D) The net present value of each new project is zero.
• E) The internal rate of return on each new project is zero.

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Definitions:

Republican Party

One of the two major contemporary political parties in the United States, traditionally supporting pro-business, conservative, and right-leaning policies.

Democratic Party

A major political party in the United States that historically has advocated for social welfare, civil rights, and governmental intervention in the economy to promote social justice.

Economic Opportunities

Prospects or chances for individuals or businesses to grow financially, commonly measured by income, employment possibilities, and market potential.

Free Blacks

Individuals of African descent who were legally free from slavery, significantly impacting societies and economies, especially in pre-Civil War America.