1. Hardchoice Corp. is a firm considering prospective capital budgeting projects. Selected data on the projects follow: Image attached Consider the following statements. Select the one that is true. 1. The NPV of project D will be much more sensitive to changes in the discount rate than will the NPV of project A. 2. If projects C and D are mutually exclusive, incremental analysis indicates that one should reject project C and accept project D. 3. It is possible for projects A and D to have the same NPV. 4. All of the above are true. 5. None of the above is true.
1. Hardchoice Corp. is a firm considering prospective capital budgeting projects. Selected data on the projects follow: Image attached
Consider the following statements. Select the one that is true.
1. The NPV of project D will be much more sensitive to changes in the discount rate than will the NPV of project A.
2. If projects C and D are mutually exclusive, incremental analysis indicates that one should reject project C and accept project D.
3. It is possible for projects A and D to have the same NPV.
4. All of the above are true.
5. None of the above is true.
The Net Present Value:
The Net Present Value is a popular capital budgeting technique that is used in assessing prospective investment proposals.
The net present value is measured as the net of the total present value of all cash inflows across the life of the project and the initial cash outflows.
A project is considered for investment if its NPV is positive and rejected if it's negative.
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