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 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 allows for a more accurate evaluation of the project's profitability by taking into account the time value of money.

In the NPV Model, All Cash Flows Are Stated ________