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When You Set the Project NPV Equal to Zero in Calculating

Question 253

Multiple Choice

When you set the project NPV equal to zero in calculating a bid price you are:


A) Going to earn zero net income on the project.
B) Appropriately including opportunity costs in your analysis.
C) Certain to be the low bidder since, if any firm does bid lower, they will be bidding based on a negative NPV project.
D) Assured of earning your firm's highest possible IRR.
E) Finding the price at which you expect to create zero wealth for your shareholders.

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