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.

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Definitions:

Human Capital

The economic value of the abilities, skills, and training of an individual or workforce.

Better Educated

Having a higher level of education or more extensive knowledge.

Better Product

A product that offers higher quality, more features, or superior performance compared to its competitors in the market.

Labor-Saving Appliances

Devices designed to reduce the amount of manual labor needed to perform household tasks, increasing efficiency and saving time.