What is a way to figure out whether an investment is profitable,and to address the time value of money?

Question

Quizplus · Accepted Answer

Net present value (NPV) is the best way to figure out whether an investment is profitable, and also address the time value of money. NPV takes into consideration the present value of all cash inflows and outflows related to an investment, discounted to current value using a discount rate that accounts for the time value of money. If the NPV is positive, the investment is expected to generate profits, while a negative NPV indicates that the investment will not be profitable. Choices A, B, and D, are not relevant to determining investment profitability or addressing the time value of money.

What Is a Way to Figure Out Whether an Investment