Assuming That This Project Will Provide Rearden with Perpetual Annual

question 32

Multiple Choice

Assuming that this project will provide Rearden with perpetual annual cash flows of $45,000,Rearden should:

• A)invest today since the NPV is positive.
• B)invest today since the NPV is negative.
• C)invest today since the NPV using the hurdle rate is negative.
• D)delay investing since the NPV using the hurdle rate is negative.
• E)delay investing since the NPV using the hurdle rate is positive.

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Definitions:

Proportion

A fraction, portion, or segment that is assessed in relation to its entire entity.

M&M Candy

A brand of small, multi-colored chocolate candies covered in a hard shell.

Probability

The likelihood that an event will happen, expressed numerically between 0 and 1.

Production Run

A manufacturing process or period during which a batch of goods is produced, often of the same product, without interruption.