Stan Calculated That the Net Present Value of His Investment

question 42

Multiple Choice

Stan calculated that the net present value of his investment would be zero with a 15 percent internal rate of return.This means that

• A) the project has no value.
• B) 15 percent can be compared to the required rate of return to determine if the project should be accepted.
• C) the project requires an additional 15 percent investment on the part of the company.
• D) the project will pay back the investment in 15 years.

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Definitions:

Cognitive Schema

Mental frameworks that help individuals organize and interpret information, influencing perception and understanding of the world.

Proposition

A statement or assertion that expresses a judgment or opinion.

Prototype

An original model on which something is patterned or based.

Mental Image

A representation of sensory information or experiences in one's mind, which does not currently exist in the physical world.