Economics · Capital Budgeting Decisions
Evaluate the following statements regarding capital budgeting: Statement A: Investments with a positive NPV are generally considered financially worthwhile. Statement B: When choosing between mutually exclusive projects based on NPV, the project with the higher positive NPV should be chosen. Statement C: Project investments with an IRR above zero are always financially worthwhile, regardless of the cost of capital. Select the correct truth value combination:
- 1A: True, B: True, C: True
- 2A: False, B: True, C: True
- 3A: True, B: False, C: True
- 4A: True, B: True, C: False✓
Correct answer
A: True, B: True, C: False
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