A company has unlimited funds to invest at its discount rate. The company should invest in all projects having:

Question

Quizplus · Accepted Answer

The best choice is to invest in all projects that have a net present value greater than zero. This ensures that the company's investment will generate a positive return after considering the time value of money and the discount rate. Simply looking at the internal rate of return, simple rate of return, or payback period may not take into account all relevant factors and could result in the company investing in projects that are not actually profitable in the long run.

A Company Has Unlimited Funds to Invest at Its Discount