Which of the Following Is Not a Rationale for Using

question 103

Multiple Choice

Which of the following is not a rationale for using the NPV method in capital budgeting?

• A) An NPV of zero signifies that the project's cash flows are just sufficient to repay the invested capital and to provide the required rate of return on that capital.
• B) A project whose NPV is positive will increase the value of the firm if that project is accepted.
• C) A project is considered acceptable if it has a positive NPV.
• D) A project is not considered acceptable if it has a negative NPV.
• E) All of the above are true.

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Definitions:

Same Industry

Refers to businesses and organizations that produce or provide similar goods and services.

Geographic Region

A specific area or section of space characterized by a particular set of features, whether natural, man-made, or social.

Dumping

Selling a product abroad for less than charged in the home market or for less than the cost of production

Research and Development Funding

Financial resources allocated for investigative activities with the intention of making discoveries that can help develop new products or services, or to improve existing ones.