The present value of an investment's net cash inflows minus the present value of its cost outlays is called the:
A) present value.
B) future value.
C) net present value.
D) discounted value.
E) present annuity value.

Question

Quizplus · Accepted Answer

The definition given corresponds to the net present value (NPV) of an investment. It is a commonly used tool in financial analysis to determine whether a project or investment is profitable or not. NPV represents the difference between the present value of cash inflows and the present value of cash outflows. If the NPV is positive, it means that the investment is profitable, while if it is negative, the investment should be rejected.

The Present Value of an Investment's Net Cash Inflows Minus