When Reducing Project Duration, There Will Always Be an Optimum

question 40

True/False

When reducing project duration, there will always be an optimum cost-time point where the total cost of the project is less than it was when the project was initially planned under normal conditions.

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Definitions:

Contract Rate

The periodic interest to be paid on the bonds that is identified in the bond indenture; expressed as a percentage of the face amount of the bond.

Market Rate

The current price in the marketplace at which an asset can be bought or sold.

Face Value

The nominal or dollar value printed on a security or financial instrument, such as a bond or stock certificate, representing its value at issuance.

Bonds' Market Value

The current price at which a bond is trading in the market, which can be above (at a premium) or below (at a discount) its face value.