If the Net Present Value Is Positive, It Could Signal

question 23

Multiple Choice

If the net present value is positive, it could signal

• A) a return in excess of the initial investment or required rate of return has been received.
• B) the required rate of return has not been achieved.
• C) the initial investment has not been recovered.
• D) a decrease in wealth for the firm.

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Definitions:

Market Efficiency

The degree to which stock prices reflect all available, relevant information, making it impossible to consistently achieve higher returns.

Oil-company Stocks

Shares that represent ownership in companies involved in the exploration, extraction, refining, and selling of oil and oil products.

Trading Day

A Trading Day is a day on which stock exchanges are open for trading, typically excluding weekends and public holidays.

Standard Deviation

Standard deviation is a statistical measure that quantifies the amount of variation or dispersion of a set of data values.