Which One of the Following Statements Concerning Net Present Value

question 42

Multiple Choice

Which one of the following statements concerning net present value (NPV) is correct?

• A) An investment should be accepted if, and only if, the NPV is exactly equal to zero.
• B) An investment should be accepted only if the NPV is equal to the initial cash flow.
• C) An investment should be accepted if the NPV is positive and rejected if it is negative.
• D) An investment with greater cash inflows than cash outflows, regardless of when the cash flows occur, will always have a positive NPV and therefore should always be accepted.
• E) Any project that has positive cash flows for every time period after the initial investment should be accepted.

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Definitions:

History of Present Illness

A detailed account given by the patient describing the timeline, severity, and nature of their current symptoms that led them to seek medical attention.

Current Condition

The present state or situation, especially concerning health or the quality of something.

Social Loafing

The tendency of individuals to put in less effort when working in a group compared to when working alone.

Coordination Loss

The inefficiency in group performance compared to individual performance, due to the difficulty of aligning the efforts and actions of all members.