If an Investment Project Has a Positive Net Present Value

question 84

Multiple Choice

If an investment project has a positive net present value, then the internal rate of return is

• A) less than the cost of capital.
• B) greater than the cost of capital.
• C) equal to the cost of capital.
• D) indeterminate; it depends on the length of the project.

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Definitions:

Medical Supplies

Items used in healthcare settings for treatment, diagnosis, or preventive measures, including equipment and consumable goods.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, making it more useful for management control.

Equipment Depreciation

The allocation of the cost of tangible assets over their useful lives, reflecting the reduction in value due to wear and usage.

Spending Variance

The difference between the budgeted or planned amount of expenses and the actual amount spent.