If in evaluating a proposal by use of the net present value method there is an excess of the present value of future cash inflows over the amount to be invested, the rate of return on the proposal is less than the rate used in the analysis.

Question

Quizplus · Accepted Answer

If there is an excess of the present value of future cash inflows over the amount to be invested, it indicates that the rate of return on the proposal is greater than the discount rate used in the analysis, not less.

If in Evaluating a Proposal by Use of the Net