Which of the Following Statements Is CORRECT

question 83

Multiple Choice

Which of the following statements is CORRECT?

• A) the npv profile graph for a normal project will generally have a positive (upward) slope as the life of the project increases.
• B) an npv profile graph is designed to give decision makers an idea about how a project's risk varies with its life.
• C) an npv profile graph is designed to give decision makers an idea about how a project's contribution to the firm's value varies with the cost of capital.
• D) we cannot draw a project's npv profile unless we know the appropriate cost of capital for use in evaluating the project's npv.
• E) an npv profile graph shows how a project's payback varies as the cost of capital changes.

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Definitions:

Trade Permits

Authorizations given by government or other regulatory bodies allowing businesses to engage in foreign trade activities.

Pollution Reduction

Actions or initiatives undertaken to decrease the amount of pollutants released into the environment.

MC Of Reducing

The marginal cost associated with reducing an output or activity, usually referring to cutting down on production or operational processes.

Marginal Social Benefit

The additional benefit to society from consuming or producing one more unit of a good or service.