Project A has a positive NPV.What should the investment manager do in this situation?
A)Accept the project.
B)Reject the project.
C)Be indifferent between accepting or rejecting the project.
D)Not make any decision as there is insufficient information to decide if the project will be beneficial to the shareholders.

Question

Quizplus · Accepted Answer

A positive NPV indicates that the project's cash inflows exceed its cash outflows, and therefore the project is expected to add value to the company. As such, the investment manager should accept the project as it is expected to benefit the shareholders.

Project a Has a Positive NPV