Normal Projects S and L Have the Same NPV When

question 24

True/False

Normal Projects S and L have the same NPV when the discount rate is zero.However, Project S's cash flows come in faster than those of L.Therefore, we know that at any discount rate greater than zero, L will have the higher NPV.

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Definitions:

Frustration

A psychological state resulting from obstacles that impede someone's ability to achieve their goals.

Reaching A Goal

The successful achievement of a specific outcome or objective.

Vacillation

The inability to decide between different opinions or actions; indecision.

Sold Out

A situation where all available units of a certain product have been sold.