If the Net Present Value of a Project Is Zero,based

question 62

Multiple Choice

If the net present value of a project is zero,based on a discount rate of 16%,which of the following statements about the project's internal rate of return is correct?

• A) It is equal to 16%.
• B) It is less than 16%.
• C) It is greater than 16%.
• D) It cannot be determined from the information given.

Understanding the phenomena of diffusion of responsibility and how it affects decision-making in groups.

Distinguishing between individual and group decision-making, including their advantages and disadvantages.

Comprehending strategies to prevent groupthink and enhance decision quality within groups.

Recognizing the effect of various biases on decision-making, including hindsight, risky shift, and conservative shift.

---

Definitions:

Gordon Model

A method to determine the value of a stock by considering expected dividends, growth rate of these dividends, and the required rate of return.

Stock Pricing Models

Theoretical models used to determine the fair value of a stock based on future dividends, free cash flow, or other attributes of the company.

Gordon Model

A dividend discount model that values a stock by assuming a constant growth rate in dividends and discounting them back to their present value.

Market Return

The total return on an investment, including dividends and capital gains, as opposed to the annual return.