Using the Net Present Value Method, the Decision Rule for Projects

question 25

Multiple Choice

Using the Net Present Value method, the decision rule for projects when finance is not a restriction is:

• A)take on all projects with a positive NPV.
• B)select the project with the largest cash inflows.
• C)select the project where the cash inflows are greatest in the early years of the project.
• D)select the project with cash flows equal to the initial investment.

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Definitions:

Affective Components

Refers to the emotional or feeling segments of an attitude, which influence how an individual feels about an object, person, or situation.

Reference Group's Attitude

The collective opinions, beliefs, or norms of a group that an individual identifies with or aspires to join, influencing their behavior and perspectives.

Situational Constraints

External factors or conditions that limit or influence an individual's actions or behavior in a given context.

Self Monitor

An individual's ability to regulate their behavior to accommodate social cues and situations.