When Comparing Several Investments with the Same Initial Outlay, the Decision

question 95

Multiple Choice

When comparing several investments with the same initial outlay, the decision should be made on the basis of which of the following?

• A) Which project has the most total cash flows
• B) Which project has the shortest payback
• C) Which project has the highest NPV
• D) Which project is completed first

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Definitions:

Void

Having no legal force or effect; null and totally ineffective.

Breach of Contract

The omission of performing any clause of an agreement, whether written or orally communicated, without a defensible legal excuse.

Payments

The act of transferring money or other valuable consideration from one party to another as a fulfillment of a legal obligation or for the acquisition of goods or services.

Contract

A legally binding agreement between two or more parties, creating obligations that are enforceable by law.