In the NPV model,all cash flows are stated ________.
A)in future value dollars,and the total inflow is "netted" against the outflow to see if the net amount is positive or negative
B)in present value or current dollars,and the outflow is "netted" against the total inflow to see if the gross amount is positive or negative
C)in present value or current dollars,and the total inflow is "netted" against the initial outflow to see if the net amount is positive or negative
D)in future dollars,and the initial outflow is "netted" against the total inflow to see if the net amount is positive

Question

Quizplus · Accepted Answer

In the NPV (Net Present Value) model, all cash flows are stated in present value or current dollars, and the total inflow is "netted" against the initial outflow to see if the net amount is positive or negative. This helps to determine the profitability of an investment by taking into account the time value of money and discounting future cash flows back to their present value.

In the NPV Model,all Cash Flows Are Stated ________