The net present value criterion (NPV)specifies that a manager should choose a project if ________.

Question

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The net present value criterion (NPV) specifies that a manager should choose a project if the sum of its discounted cash flow is positive. This means that the project's expected cash inflows, discounted to present value using the required rate of return, exceed the project's expected cash outflows. A positive NPV indicates that the project is expected to increase shareholder wealth, while a negative NPV indicates that the project is expected to decrease shareholder wealth. Therefore, the best choice is option D.

The Net Present Value Criterion (NPV)specifies That a Manager Should