Which of the following statements is true?
A) Stockholders prefer corporations to make investments when the net present value is positive.
B) Stockholders prefer corporations to make investments only when the probability of loss is very low.
C) Most corporate charters require a stockholder vote on decisions concerning large investment projects.
D) Stockholders prefer corporations to make all investments with positive net incomes.

Question

Quizplus · Accepted Answer

Stockholders prefer corporations to make investments when the net present value (NPV) is positive because it indicates that the investment is expected to generate more cash than it costs, thereby increasing shareholder value.

Which of the Following Statements Is True