In Using the Net Present Value Method, Only Projects with a Zero

question 64

Multiple Choice

In using the net present value method, only projects with a zero or positive net present value are acceptable because ________.

• A) the return from these projects equals or exceeds the cost of capital
• B) a positive net present value on a particular project guarantees company profitability
• C) the company will be able to pay the necessary payments on any loans secured to finance the project
• D) it results in high payback period

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