If the NPV is positive, it signals a. that the initial investment has been recovered. b. that the required rate of return has been earned. c. that the value of the firm has decreased. d. all of these. e. both a and b.

If the NPV is positive, it signals a. that the initial investment has been recovered. b. that the required rate of return has been earned. c. that the value of the firm has decreased. d. all of these. e. both a and b.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter2: Financial Reporting: Its Conceptual Framework

Section: Chapter Questions

Problem 10GI: Define (a) return on investment, (b) risk, (c) financial flexibility, (d) liquidity, and (e)...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

If the NPV is positive, it signals

a. that the initial investment has been recovered.

b. that the required rate of return has been earned.

c. that the value of the firm has decreased.

d. all of these.

e. both a and b.

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