The NPV of an Investment Proposal Becomes Negative Solely as a Result

question 103

Multiple Choice

The NPV of an investment proposal becomes negative solely as a result of allocating a portion of the corporation president's salary.It is most likely the case that:

• A) the project should be accepted.
• B) rejecting the project is the correct decision.
• C) the allocation should be postponed until the project is accepted.
• D) the salary should be considered an opportunity cost of the project.

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Definitions:

Court of King's Bench

A historical court in England that dealt with common law matters, including civil and criminal cases.

Exchequer Court

A historical court in England responsible for managing the government's finances and adjudicating cases related to revenue and taxes.

Substantive Law

The set of laws that govern how members of a society are to behave, outlining rights and duties, as opposed to procedural law which outlines how those laws are enforced.

Procedural Law

Part of the legal system that dictates the process and methods by which the law is practiced and enforced.