If the net present value of an investment project is positive then the:

Question

Quizplus · Accepted Answer

A positive net present value (NPV) indicates that the present value of expected cash inflows from the project is greater than the present value of cash outflows. Therefore, the project would be acceptable under the NPV method, and the project's rate of return would be greater than the firm's cost of capital. Option A is incorrect because a positive NPV indicates that the internal rate of return for the project is greater than the required rate of return. Option B is also incorrect because the payback method does not consider the time value of money and therefore cannot adequately evaluate the profitability of a project.

If the Net Present Value of an Investment Project Is