Which of the Following Statements Regarding Net Present Value (NPV)is

question 74

Multiple Choice

Which of the following statements regarding Net Present Value (NPV) is INCORRECT?

• A)The NPV represents the value of the project in terms of cash today.
• B)Good projects will have a positive NPV.
• C)The NPV of a project is the difference between the present value of its benefits and the present value of its costs.
• D)When faced with a set of alternatives,choose the one with the lowest NPV in order to minimize the present value of costs.

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Definitions:

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Significance Level

The threshold below which a p-value is considered statistically significant, typically set at 0.05 or 5%.

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The average value of a particular characteristic for all the individuals within a population.

Pooled Variance

A method used to estimate the variance of two or more different samples that assume the underlying population variances are equal.