A Project Has a Net Present Value of $1,200 and a Project

question 29

Multiple Choice

A project has a net present value of $1,200 and a project life of four years.Which one of these statements must be true?

• A)The project's IRR is less than the required rate of return.
• B)The project is expected to return $1,200 in Time 0 dollars over and above the discount rate.
• C)The project would also have a positive net present value if Year 4 was omitted.
• D)The project's cash inflows exceed its outflows by $1,200 over the four years.
• E)The project is expected to return $1,200 in Year 4 dollars over and above the initial investment.

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Definitions:

Eschar

A dry, dark scab or falling away of dead skin typically formed on a wound or burn site.

Debridement

The surgical excision of necrotic, impaired, or diseased tissue to enhance the healing capabilities of the surrounding healthy tissue.

Dermabrasion

A skin resurfacing procedure that uses a rapidly rotating device to remove the outer layers of skin, used for scar and wrinkle removal.

Cryosurgery

A surgical technique that uses extreme cold to destroy abnormal or diseased tissue.