The _____ of an investment is the value of future income (discounted at the firm's cost of capital) minus the up-front investment costs.
A)net opportunity cost
B)adjusted payback period
C)discounted payback period
D)net present value
E)adjusted opportunity cost

Question

Quizplus · Accepted Answer

The net present value (NPV) of an investment is calculated by discounting the future cash flows at the firm's cost of capital and subtracting the initial investment. NPV is a measure of the value created by the investment and is commonly used to evaluate the profitability of a capital project.

The _____ of an Investment Is the Value of Future