A Proposed Project Has a Positive NPV If It Is

question 5

Multiple Choice

A proposed project has a positive NPV if it is financed entirely by equity.If the project can sensibly be financed partly by debt and the firm pays tax,will the project remain acceptable?

• A) Yes, using debt will increase the NPV.
• B) No, using debt will decrease the NPV.
• C) The project may now become unacceptable.
• D) There will be no change in the project's NPV.

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Definitions:

Administrative Procedure Act

Legislation governing the process by which federal administrative agencies propose and establish regulations.

Statute

A formal written law enacted by a legislative body; statutes govern areas not covered by common law.

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stands for the Freedom of Information Act, a U.S. law that grants the public the right to request access to records from any federal agency, promoting transparency in government.

Federal Agencies

Government bodies established by the United States Congress to implement and administer specific federal laws and policies.