The Net Present Value (NPV) of an Activity or Project

question 82

Multiple Choice

The net present value (NPV) of an activity or project is:

• A) equal to the future value of all the revenues minus the present value of all the costs associated with it.
• B) equal to the present value of all the revenues minus the present values of all the costs associated with it.
• C) equal to the present value of all the revenues minus the future values of all the costs associated with it.
• D) equal to the future values of all the revenues minus the future values of all the costs associated with it.

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Definitions:

Graph Equation

A mathematical representation of relationships between variables, often plotted on a coordiante system.

Absolute Value

The distance of a number from zero on the number line, without considering direction; expressed as \(|x|\) for a number \(x\).

Sketch Graph

A basic drawing that represents the general shape and major features of a mathematical function or relation without showing precise values.

Equation

A mathematical statement that asserts the equality of two expressions, typically including variables and constants.