A Negative Net Present Value Means That The

question 44

Multiple Choice

A negative net present value means that the:

• A) Internal rate of return is less than the required rate of return
• B) Project is acceptable
• C) Present value of the inflows exceeds the present value of the outflows
• D) Company chose the wrong discount rate

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Definitions:

Private Information

Information that some people have, but others do not.

Economic Decisions

Choices made by individuals, businesses, or governments involving the allocation of resources to satisfy their needs and desires.

Correlated Risks

Risks that are linked in such a way that the occurrence of one affects the likelihood of the occurrence of another.

Agricultural Industry

The sector of the economy that deals with the production, processing, and distribution of food, fibers, and other goods derived from farming and related activities.