The net present value always provides the correct decision provided that
A) cash flows are constant over the asset's life.
B) the required rate of return is greater than the internal rate of return.
C) capital rationing is not imposed.
D) the internal rate of return is positive.

Question

Quizplus · Accepted Answer

Capital rationing not being imposed allows for all projects with a positive NPV to be accepted, ensuring the correct decision is made based on the maximization of shareholder wealth.

The Net Present Value Always Provides the Correct Decision Provided