In a Capital Budgeting Decision, If a Firm Uses the Net

question 76

Multiple Choice

In a capital budgeting decision, if a firm uses the net present value method and a 12% discount rate, what does a negative net present value indicate?

• A) the proposal's rate of return exceeds 12%.
• B) the proposal's rate of return is less than the minimum rate required.
• C) the proposal earns a rate of return between 10% and 12%.
• D)none of the above.

---

Definitions:

Formal Operational Thinking

A stage of cognitive development in Piaget's theory, where individuals gain the ability to think abstractly, reason logically, and organize thoughts coherently.

Strategic Knowledge

Understanding and applying knowledge about strategies that can help in learning, remembering information, solving problems, and other cognitive tasks.

Concrete Operational Thinking

A stage in cognitive development where children are able to think logically about concrete events and objects.

Adolescent

An individual in the stage of development between childhood and adulthood, typically between the ages of 10 and 19.