Which of the Following Is True of NPV Profile

question 63

Multiple Choice

Which of the following is true of NPV profile?

• A) It is used for evaluating and comparing independent projects when conflicting ranking exists.
• B) It is a graph that illustrates a project's IRR against various values of NPV.
• C) It shows an inverse relationship between a project's IRR and NPV.
• D) It charts the net present value of a project as a function of the cost of capital.

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Definitions:

CCA Class

A categorization under Canadian tax law that groups depreciable assets affecting the rate at which businesses can claim capital cost allowance for tax purposes.

Tourism Revenue

The income generated from tourists, including spending on accommodations, food, transport, and entertainment in the destination.

CCA Tax Shield

A tax deduction that allows businesses to depreciate the cost of tangible property or assets over time, reducing taxable income.