Net Present Value Break-Even Is Reached

question 7

Multiple Choice

Net present value break-even is reached

• A)after the time period when NPV finally turns from negative to positive.
• B)at the discount rate that produces an NPV of $0.00.
• C)at the level of sales over the life of the project that results in free cash flow of $0.000 for a given period.
• D)at the level of sales over the life of the project that results in an NPV of $0.00.

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Definitions:

Compensating Differential

The difference in wages that compensates workers for undesirable aspects of a job, such as long hours or dangerous conditions.

Human Capital

The qualifications, know-how, and lived experiences of a person or society, assessed in terms of their profitability or cost to a business or country.

Compensating Differential

The additional amount of income that a worker requires to accept a job with undesirable features, compared to a similar job with more favorable features.

Cardiologist

A specialist doctor who diagnoses and treats conditions related to the heart and blood vessels.