If a Project's Expected Rate of Return Exceeds Its Opportunity

question 35

Multiple Choice

If a project's expected rate of return exceeds its opportunity cost of capital,one would expect:

• A) the profitability index to be negative.
• B) the opportunity cost of capital to be too low.
• C) the project to have a positive NPV.
• D) the NPV to be zero.

---

Definitions:

Memory Confidence

The level at which one trusts the accuracy of their own memories.

Memory Bias

The tendency for our memories to be influenced by our current emotions, beliefs, and knowledge, leading to distortions or inaccuracies in how we remember past events.

Current Beliefs

Refers to the present beliefs or opinions that an individual or group holds, which can influence behavior and attitudes.

Flashbulb Memory

A highly detailed and vivid memory of an emotionally significant moment or event.