Which one of the following statements is correct? Select one: a. Net present val

ID: 2741698 • Letter: W

Question

Which one of the following statements is correct?

Select one:

a. Net present value is equal to an investment's cash inflows discounted to today's dollars.

b. The net present value is positive when the required return exceeds the internal rate of return.

c. The net present value is a measure of profits expressed in today's dollars.

d. If the internal rate of return equals the required return, the net present value will equal zero.

e. If the initial cost of a project is increased, the net present value of that project will also increase.

A project should be accepted when the:

Select one:

a. AAR is less than the targeted AAR.

b. Payback period is greater than the prescribed number of years.

c. Net present value is negative.

d. IRR exceeds the required rate.

e. Profitability index is less than 1.0.

The higher the standard deviation of a stock the:

Select one:

a. Lower the risk premium given a normal market.

b. Lower the volatility level over a period of time.

c. Greater the probability that the actual return for any one year will equal the average historical return.

d. Narrower the bell curve and the smaller the probability ranges.

e. None of the above

1) Correct statement is - d. If the internal rate of return equals the required return, the net present value will equal zero.

2) A project should be accepted when the:

d. IRR exceeds the required rate.

3) The higher the standard deviation of a stock the:

e. None of the above

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