If the net present value of a proposed project is positive,then the actual rate of return

Question

Quizplus · Accepted Answer

A positive net present value indicates that the present value of cash inflows is greater than the present value of cash outflows for the proposed project. This means that the project is expected to generate returns that are higher than its cost of capital, which is the minimum rate of return that an investor requires for investing in the project. Therefore, the actual rate of return must be higher than the cost of capital to generate a positive net present value.

If the Net Present Value of a Proposed Project Is