When analyzing capital investments using the NPV method, the first step is to discount the initial investment.

Question

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The first step in analyzing capital investments using the NPV method is to calculate the present value of all cash inflows and outflows over the life of the investment, not just to discount the initial investment. The initial investment is typically a cash outflow at time zero and does not need to be discounted.

When Analyzing Capital Investments Using the NPV Method, the First