When Evaluating Capital Budgeting Projects, Which of the Following Would

question 42

Multiple Choice

When evaluating capital budgeting projects, which of the following would NOT necessarily be an indicator of an acceptable project?

• A) an NPV > $0
• B) an IRR > the project's required rate of return
• C) an IRR > $0
• D) All of the above are correct indicators.

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Definitions:

Sill

A tabular igneous intrusion that parallels layers or other planar structures of the surrounding rock and which usually has a subhorizontal orientation.

Laccolith

A bulge-shaped igneous body that has domed and tilted overlying layers and that is observed or interpreted to have a relatively flat floor.

Felsic Magmas

Magma that is high in silica and light in color, which forms rocks such as granite and rhyolite upon cooling.

Intermediate

A term used to describe entities or phenomena that fall in the middle of a specified range or scale, often used in geological contexts to describe rocks or volcanic activities with properties between felsic and mafic.