Answer (D) is correct . A company should accept any investment proposal, unless some are mutually exclusive, that has a positive net present value or an internal rate of return greater than the company’s desired rate of return.
Answer (A) is incorrect because The mere availability of financing is not the only consideration; more important is the cost of the financing, which must be less than the rate of return on the proposed investment.
Answer (B) is incorrect because An investment with positive cash flows may be a bad investment due to the time value of money; cash flows in later years are not as valuable as those in earlier years.
Answer (C) is incorrect because Returns should exceed the desired rate of return.
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