A Firm Can Accept a Project with a Net Present

question 160

Multiple Choice

A firm can accept a project with a net present value of zero because ________.

• A) the project would maintain the wealth of the firm's owners
• B) the project would enhance the wealth of the firm's owners
• C) the project would maintain the earnings of the firm
• D) the project would enhance the earnings of the firm

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Definitions:

Benefit of Abatement

This refers to the advantages or positive effects derived from reducing or eliminating negative environmental impacts or pollutants.

External Benefits

Positive effects of a product or a decision that are enjoyed by people other than those who decide to produce or consume the product.

Allocation of Resources

The process by which resources are distributed for the production of goods and services within an economy.