Unit 11 quiz

The net present value of an investment represents the difference between the investment's: cash inflows and outflows. cash flows and its profits. cost and its market value. cost and its net profit. assets and liabilities.

cost and its market value

The net present value profile illustrates how the net present value of an investment is affected by which one of the following? Inflation rate Timing of the project's cash inflows Discount rate Real rate of return Project's initial cost

discount rate

Net present value involves discounting an investment's: costs. liabilities. future profits. assets. future cash flows.

future cash flows

Which one of the following indicates that a project is expected to create value for its owners?

positive NPV

The possibility that more than one discount rate can cause the net present value of an investment to equal zero is referred to as:

multiple rates of return