The net present value of a growth opportunity, NPVGO, can be defined as: A)the initial investment necessary for a new project. B)the net present value per share of an investment in a new project. C)a continual reinvestment of earnings when r g. E)None of the above.

Question

The net present value of a growth opportunity, NPVGO, can be defined as:
A)the initial investment necessary for a new project.
B)the net present value per share of an investment in a new project.
C)a continual reinvestment of earnings when r < g.
D)a single period investment when r > g.
E)None of the above.

Quizplus · Accepted Answer

The Answer is B

The Net Present Value of a Growth Opportunity, NPVGO, Can