Positive NPV Projects Exist Because

question 9

Multiple Choice

Positive NPV projects exist because:

• A) analysts select high discount rates.
• B) most projects are unique and innovative.
• C) cash-flow projections are extended into the future.
• D) firms hold competitive advantages.

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Definitions:

Indirect Method

A technique used in cash flow statements to adjust net income for non-cash transactions, depreciation, and changes in working capital.

Depreciation Expense

The portion of an asset's initial cost allocated over a specific period as an expense, reflecting its usage and deterioration.

Operating Activities

Activities that relate directly to the business's primary operations, like selling products or services, as opposed to investment or financing activities.

Accounts Receivable

Money owed to a company by its clients or customers for products or services sold on credit.