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:

Policy Advocacy

The act of actively promoting and pushing for changes in public policy to address specific issues or causes.

Political Rationale

The reasoning or logic behind political actions or policies, often considered in terms of strategic advantages or goals.

Analytic Rationale

The logical reasoning or analysis used to understand or justify decisions, policies, or strategies, often involving systematic examination of data or facts.

Liberal Rationale

Reasoning based on principles emphasizing freedom, democracy, and the importance of individual rights.