The decision to accept positive NPV international projects increases the value of a firm, and it should be consistent with maximizing stockholder wealth.

Question

Quizplus · Accepted Answer

Accepting international projects with positive net present value (NPV) increases the overall value of a firm and is consistent with the goal of maximizing shareholder wealth. NPV analysis takes into account all of the future cash flows generated by a project, discounting them to the present value and comparing that to the initial investment. If the NPV is positive, it indicates that the project's benefits outweigh its costs, creating value for the firm. This decision aligns with the financial objective of maximizing shareholder wealth, as it leads to a higher stock price and greater shareholder returns.

The Decision to Accept Positive NPV International Projects Increases the Value