When the Net Present Value (NPV)of an Investment Is Positive,the

question 2

True/False

When the net present value (NPV)of an investment is positive,the benefits exceed the costs and the investment should be made.

---

Definitions:

Invested

The method of placing financial resources in expectation of yield or profit.

Compounded Semi-annually

This refers to the process of applying interest to an initial sum plus any previously earned interest, and this action occurs twice a year.

Compounded Quarterly

Refers to the process of calculating and adding interest to the principal balance four times a year.

Eight Year Note

A debt instrument with a fixed interest rate and a maturity of eight years, at which point the principal sum is repaid to investors.