If Net Present Value of a Project Is Greater Than

question 135

True/False

If net present value of a project is greater than zero, the firm will earn a return greater than its cost of capital. The acceptance of such a project would enhance the wealth of the firm's owners.

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Definitions:

Fixed Cost

A cost that remains constant, regardless of changes in the level of production or sales activities.

Factory Supervisor

An individual responsible for overseeing the production process and workers in a manufacturing setting.

Merchandising Company

A merchandising company is a business that purchases finished products and sells them to consumers, without altering the product's form.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.