To Accept a Capital Project When Using NPV

question 7

Multiple Choice

To accept a capital project when using NPV:

• A) the project NPV should be less than zero.
• B) the project NPV should be equal to zero.
• C) the project NPV should be greater than zero.
• D) a and b.

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Definitions:

Name Calling

A tactic used in argumentation or insult where derogatory or unpleasant terms are used about an individual or group.

Tax Increase

A raise in the amount of money that must be paid to the government based on earnings, property value, or purchases, often implemented to fund public services.

Representativeness Heuristic

A cognitive shortcut used in decision making, where the likelihood of an object belonging to a category is assessed based on how similar it is to one's conception of that category.

Conjunction Fallacy

A logical fallacy where people incorrectly judge the probability of the conjunction of two events to be more likely than the probability of a single one of those events.