If the Net Present Value of a Project Is $1,000

question 67

Multiple Choice

If the Net Present Value of a project is $1,000 after using a discount rate of 8%, then one can conclude that the Internal Rate of Return is:

• A)greater than 8%.
• B)8%.
• C)between 8% and 10%.
• D)less than 8%.

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Definitions:

Law of Demand

The economic principle that, all else being equal, there is an inverse relationship between the price of a good and the quantity demanded.

Other-Things-Equal Assumption

The assumption that factors other than those being considered are held constant. Also known as the ceteris paribus assumption.

Supply

The total amount of a specific good or service that is available to consumers at current prices.

Excise Tax

A tax imposed on specific goods, services, or activities, such as tobacco, alcohol, and fuel, usually intended to discourage their use or generate revenue.