Unlike Other Methods,present Value Analysis Indicates That a Project Should

question 19

Multiple Choice

Unlike other methods,present value analysis indicates that a project should be undertaken if the NPV is greater than zero regardless the income distribution.

• A) True
• B) False
• C) Uncertain

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Definitions:

Profit

The financial gain realized when the revenue generated from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Total Revenue

The total amount of money a company receives from its sales of goods or services, not subtracting any costs.

Profit

The profit achieved when the revenue from a business activity surpasses the necessary expenses, costs, and taxes to maintain that activity.

Economic Costs

The total expenses incurred in producing a good or service, including opportunity costs.