Using the net present value method, the decision rule for projects when finance is not a restriction is:

Question

Quizplus · Accepted Answer

The net present value method states that projects should be accepted if their NPV is positive. This means that the project will generate more cash inflows than the cost of the investment, providing a positive return on investment. Therefore, the best choice is to select all projects with a positive NPV, regardless of the size of the cash inflows, the timing of the cash flows, or the initial investment.

Using the Net Present Value Method, the Decision Rule for Projects