A project whose cash flows are more than the capital invested for rate of return then the net present value will be _________?
Correct answer: A. positive
- A. positive
- B. independent
- C. negative
- D. zero
Explanation
When the present value of project cash inflows exceeds the capital invested, the project creates value and its NPV is positive. A negative NPV means the discounted cash inflows are insufficient to recover the investment.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
Practise Business Finance
975 free Business Finance MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Business Finance questions
In the mutually exclusive projects, the project which is selected for comparison with others must have _________?
The relationship between Economic Value Added (EVA) and the Net Present Value (NPV) is considered as _________?
An uncovered cost at start of year is $200, full cash flow during recovery year is $400 and prior years to full recovery is 3 then payback would be ________?
The high price to earnings ratio shows companies ____________?
The return on assets = 5.5%, Total assets $3,000 and common equity is $1,050 then the return on equity would be _________?
The price earnings ratio and price by cash flow ratio are classified as __________?