Use the Information Below to Answer the Following Question(s)

question 57

Multiple Choice

Use the information below to answer the following question(s) .Wet Water Company drills residential and commercial wells.The company is in the process of analyzing the purchase of a new drill.Information on the proposal is provided below:
Note: Other than the initial investment, cash flows are end of period.The working capital is returned at the end of the investment period.
-Which of the following is TRUE, concerning NPV?

• A)When the NPV is positive, the sum of the cash flows from the project equal the initial investment.
• B)When the NPV is negative, the sum of the cash flows from the project must also be negative.
• C)The project just recovers the initial investment, discounted by the hurdle rate.
• D)The IRR is less than the RRR when the NPV is positive, after using the RRR as the discount rate.
• E)When the NPV is positive, the project recovers the initial investment and earns a return greater than the RRR.

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Definitions:

Arithmetic Logic Unit

A component of a computer's processor (CPU) responsible for carrying out arithmetic and logic operations, such as addition, subtraction, and comparisons.

Control Unit

The part of a computer's central processing unit (CPU) that directs the operation of the processor.

Binary Code

A system of representing text or computer processor instructions using the binary number system's 0 and 1.

File Sizes

The measure of the amount of data a file contains, usually quantified in bytes (KB, MB, GB, etc.).