According to the Net Present Value (NPV)method of Evaluation of Projects,if

question 15

Multiple Choice

According to the Net Present Value (NPV) method of evaluation of projects,if there are cash outflows for multiple periods

• A) only the cash outflows for the first five years will have to be discounted back to the current period.
• B) the NPV of the project will definitely be positive.
• C) the discount rate will need to be altered.
• D) those cash outflows will have to be discounted back to the current period.

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Definitions:

Marginal Revenue (MR)

The revenue derived from selling one additional unit of output.

Marginal Cost

The additional expense associated with manufacturing one extra unit of a product, emphasizing the cost variation.

Marginal Revenue

The additional income that is generated by selling one more unit of a product or service.

Loss Minimization

A strategy in economics and business focused on reducing the losses incurred by a firm or individual to the lowest possible level.