The Net Present Value

question 68

Multiple Choice

The net present value

• A) uses the discounted cash flow valuation technique.
• B) will provide a direct measure of how much a firm's value will change because of the capital project.
• C) is consistent with shareholder wealth maximization goal.
• D) All of the above

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Definitions:

Sole Shareholder

An individual or entity that owns 100% of the shares of a corporation.

Nonshareholder-Creditors

Creditors of an entity who, unlike shareholders, do not own any part of the entity but have a claim on its assets due to outstanding debts.

Shareholder Domination

A situation where a single shareholder or a group of shareholders exercise significant influence or control over the operations of a corporation.

Individual Shareholder

An individual who owns shares in a company, thereby holding a portion of the ownership.