You should invest if a new project if

Question

Quizplus · Accepted Answer

The NPV (net present value) is a measure of the project's profitability, calculated as the present value of expected future cash flows minus the initial investment. If the NPV is positive, it means that the project is expected to generate more cash inflows than outflows, resulting in a profit. Therefore, a positive NPV is a good indicator that the project is worth investing in. A NPV of 1 is too low and not a good enough indicator for investing, and a NPV equal to the discount rate means that the project is just breaking even and may not be worth the investment.

You Should Invest If a New Project If