The Net Present Value (NPV)decision Rule Is

question 4

Multiple Choice

The net present value (NPV) decision rule is:

• A) Accept the project if the NPV is < 0
• B) Reject the project if the NPV is > 0
• C) Accept the project if the NPV is > 0
• D) Accept the project if the NPV = 0

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Definitions:

Deficit Financing

The practice of funding government spending through borrowing rather than through taxation, leading to a government deficit.

Interest Charges

The charge applied by a lender on a borrower for asset utilization, indicated as a percentage of the principal value.

CCC (Cash Conversion Cycle)

A gauge determining how long a company takes to convert investments in stock and other resources into cash flows from sales operations.

Working Capital Management

The management of a company’s short-term assets and liabilities to ensure its continued operation and maximize financial efficiency.