Post Utme Babcock University 2023 Economics Question 7

Practice objective / multiple choice question 7 from the 2023 Post Utme Babcock University Economics examination.

Post Utme Babcock University 2023 Economics Objective / Multiple Choice
Question 7 POST_UTME_BABCOCK_UNIVERSITY • 2023 • ECONOMICS • objective

A firm is considering investing in a new project that has a net present value (NPV) of ₦1,500,000. However, the firm's \cost of capital is 10% per annum. U\sing the concept of NPV, explain why the firm should or should not invest in the project.

Answer Options

Correct Answer A. The firm should invest in the project because the NPV is positive.
B. The firm should not invest in the project because the NPV is negative.
C. The firm should invest in the project because the \cost of capital is less than the NPV.
D. The firm should not invest in the project because the NPV is less than the \cost of capital.
Correct Answer
A
Correct Option:
The firm should invest in the project because the NPV is positive.

About This Question

This is Post Utme Babcock University 2023 Economics Question 7. It is one of the objective questions from the 2023 Post Utme Babcock University Economics examination.

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