When the Present Value of the Cash Inflows Exceeds the Initial

question 60

Multiple Choice

When the present value of the cash inflows exceeds the initial cost of a project,then the project should be:

• A)accepted because the internal rate of return is positive.
• B)accepted because the profitability index is greater than 1.
• C)accepted because the profitability index is negative.
• D)rejected because the internal rate of return is negative.
• E)rejected because the net present value is negative.

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Definitions:

Slave Valve Piston

A component within a hydraulic or pneumatic system that moves in response to the pressure changes transmitted by the master cylinder or valve.

Auxiliary Section

A supplementary section or division in a document or machine that supports the main part or function.

Bearing Installation

The process of fitting bearings into machinery or equipment, ensuring proper alignment, lubrication, and functionality.

Infra-red Thermometer

A device that measures temperature from a distance by detecting the infrared radiation emitted by an object.