One of the tasks for financial managers when identifying projects that increase firm value is to identify those projects where

Question

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Financial managers must identify projects where the benefits outweigh the costs to increase the firm's overall value. Simply increasing the book value of the firm's common stock or decreasing the book value of the firm's debt outstanding may not necessarily result in an increase in overall value. Instead, managers must consider the net present value (NPV) of a project, which takes into account the time value of money and compares the present value of expected benefits to the present value of expected costs. Projects with a positive NPV are likely to increase the firm's value.

One of the Tasks for Financial Managers When Identifying Projects