The net present value technique is an approach that goes against the goal of shareholder wealth maximization.

Question

Quizplus · Accepted Answer

The net present value technique is actually in favor of the goal of maximizing shareholder wealth. NPV involves discounting future cash flows to their present value, and then subtracting the initial investment made. If the resulting value is positive, the investment is deemed profitable and will add value to the shareholders. Therefore, NPV helps managers in selecting those projects or investments which have the potential to increase shareholder wealth.

The Net Present Value Technique Is an Approach That Goes