If the Discount Rate That Is Used to Evaluate a Project

question 66

Multiple Choice

If the discount rate that is used to evaluate a project is equal to the project's internal rate of return,the project's ____ is zero.

• A)profitability index
• B)internal rate of return
• C)present value of the investment
• D)net present value

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Definitions:

Merger Premium

The additional amount an acquirer pays over the current market price of a target company's shares during a merger or acquisition.

Market Price

The price at this moment for buying or selling an asset or service.

Cash Acquisition

The purchasing of a company or asset with immediate payment in full in cash, instead of using financing options or issuing shares.