If a Project's Net Present Value Is Positive,the Internal Rate

question 57

Multiple Choice

If a project's net present value is positive,the internal rate of return is:

• A)less than the discount rate.
• B)equal to the discount rate.
• C)greater than the discount rate.
• D)cannot be determined without more information.
• E)None of the answer choices is correct.

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Definitions:

Preferred Stock

represents a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, usually with fixed dividends.

Earnings Per Share

A financial ratio that measures the amount of profit attributed to each outstanding share of common stock, indicating a company's profitability on a per-share basis.

Net Income

The total earnings of a company after subtracting all expenses from its total revenue, representing the profit or loss in a financial period.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities.