Net present value can be defined as:
A) The rate of return that causes the present value of all cash flows associated with a project to equal zero.
B) The discount rate that causes the current value of cash inflows to exceed the current value of cash outflows.
C) A measure of the value created or added today by undertaking a project.
D) The cash outflows from a project subtracted from the cash inflows for the project.
E) The net costs of a project subtracted from the net income generated from the project.

Question

Quizplus · Accepted Answer

Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or project, representing the difference between the present value of cash inflows and the present value of cash outflows. It measures the value created today by undertaking a project, indicating how much value an investment or project adds to the firm.

Net Present Value Can Be Defined As