One Assumption of the Net Present Value Method of Investment

question 52

Multiple Choice

One assumption of the net present value method of investment decision making is:

• A) that the cash flows have occurred at the end of each relevant period.
• B) that projects are suitable investments if the NPV equals zero.
• C) that cash flows are constant throughout the project.
• D) that projects with lower NPVs are more profitable.

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Definitions:

Contingency Theories

A group of leadership theories suggesting that the best leadership strategy is contingent upon various internal and external situations.

Leadership Efficiency

The ability of a leader to achieve desired outcomes with minimal waste of time, effort, or resources.

Trait Approach

A perspective in leadership that suggests certain physical, social, and personal characteristics are inherent to leaders.

Significant Correlations

Statistical relationships between two variables indicating a strong association that is not likely due to chance alone.