In order to generate a positive NPV project, a firm must have competitive advantage.

Question

Quizplus · Accepted Answer

A positive NPV project means that the net present value of the project's cash inflows is greater than the net present value of its cash outflows. To achieve this, the firm must have a competitive advantage that allows it to earn higher returns on its investments compared to its competitors. Otherwise, the project's cash inflows will be too low to generate a positive NPV.

In Order to Generate a Positive NPV Project, a Firm