Which Statement About the NPV Is True

question 31

Multiple Choice

Which statement about the NPV is true?

• A)The NPV method was once the favourite of academics and business executives, but today most authorities regard the MIRR as being the best indicator of a project's profitability.
• B)The NPV method is regarded by most academics as being the best indicator of a project's profitability; hence, most academics recommend that firms use only this one method.
• C)A project's NPV depends on the total amount of cash flows the project produces, but because the cash flows are discounted at the WACC, it does not matter if the cash flows occur early or late in the project's life.
• D)The NPV and IRR methods may give different recommendations regarding which of two mutually exclusive projects should be accepted, but they always give the same recommendation regarding the acceptability of a normal, independent project.

Interpret the financial information to understand an entity’s investment strategy and its impact on financial statements.

Identify the structural components of the mammalian kidney and their specific functions.

Understand the process and significance of filtration in the mammalian kidney.

Describe the countercurrent multiplier mechanism and its role in urine concentration.

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Definitions:

Break-even Analysis

A calculation that determines when a business or project will be able to cover all its expenses and begin to make a profit.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain scale, such as rent, salaries, and insurance.

Variable Costs

are expenses that change in proportion to the activity of a business, such as sales volumes, including costs of goods sold and direct labor costs.

Selling Price

The actual price at which a product or service is sold to customers.