When undertaking a net present value analysis, the first step in the process would be to determine:

Question

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The first step in the net present value analysis is to determine the cash flows during each year of the proposed investment. Without this information, it is impossible to calculate the net present value of the investment. A, B, and C may be important factors to consider later in the analysis, but they are not the first step.

When Undertaking a Net Present Value Analysis, the First Step