If the NPV form a project is positive it must be that
A)the discounted payback period is longer than the useful life of the project.
B)the internal rate of return is lower than the discount used.
C)the project is not acceptable on a risk adjusted basis.
D)this project is preferred to any other mutually exclusive project.
E)accepting the project increases the value of the firm.

Question

Quizplus · Accepted Answer

A positive NPV indicates that the present value of the project's cash inflows is greater than the present value of its cash outflows, which means accepting the project will increase the value of the firm. The other options are not necessarily true or relevant to the NPV calculation.

If the NPV Form a Project Is Positive It Must