No Matter What the Probability Distribution of Future Exchange Rates

question 17

True/False

No matter what the probability distribution of future exchange rates is, as long as one out of several scenarios results in a negative net present value (NPV), a project should not be accepted.

---

Definitions:

Cash

Money in the form of coins or notes, as opposed to checks, credit, or other forms of payment.

Loss

The negative financial result from a business’s operations or transactions when costs and expenses exceed revenues.

Net Income

The amount of money left after all expenses, taxes, and costs have been subtracted from total revenue, indicating the profit earned by a company.

Indirect Method

A cash flow statement preparation method that adjusts net income for the changes in balance sheet accounts to calculate the cash from operating activities.