In calculating the net present value of an investment in equipment,the required investment and its terminal residual value should be subtracted from the present value of all future cash inflows.

Question

Quizplus · Accepted Answer

The required investment should be subtracted from the present value of future cash inflows, but the terminal residual value should be added, not subtracted, as it represents a cash inflow at the end of the investment period.

In Calculating the Net Present Value of an Investment in Equipment,the