Quiz Ch 08 – Opportunity Cost of Rejecting Positive-NPV Projects
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
What represents the opportunity cost for shareholders when a manager rejects a positive NPV project?
What represents the opportunity cost for shareholders when a manager rejects a positive NPV project?
What is done with the cash flows in the computation of a project’s payback period?
What is a correct statement regarding a project with a positive NPV?
The profitability index chooses projects by prioritizing the:
What is the outcome when you use a profitability index to compare mutually exclusive projects without capital constraints?
What condition indicates the acceptability of a project, provided that the NPV decreases as the discount rate rises?
Which statement must be true for a specific set of project cash flows?
What can be concluded when a project has a cost of $50,000 and a profitability index of 0.45?
In straightforward situations with hard capital rationing, projects can be assessed using:
What action should be taken for a project when its IRR is lower than the opportunity cost of capital?