Which of the Following Formulas Regarding Net Present Value (NPV)is

question 39

Multiple Choice

Which of the following formulas regarding net present value (NPV) is correct?

• A)NPV + PV(benefits)= PV(Cost)
• B)NPV - PV(costs)= PV(benefits)
• C)NPV = PV(all project cash flows)
• D)NPV = PV(benefits)+ PV(costs)
• E)NPV -PV(benefits)- PV(costs)= 0

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Definitions:

Liquidated Damages

A set sum of money required as a penalty for not fulfilling contractual obligations.

Injunction

A legal order issued by a court that directs an individual or entity to do or to refrain from doing a specific act, used to prevent harm or to preserve the status quo pending a final determination of the case.

Specific Performance

A legal remedy requiring a party to execute a contract as agreed, rather than paying damages for non-performance.

Specific Performance

A legal remedy that compels a party to execute a contract according to the precise terms agreed upon, rather than awarding damages for breach.