PRC-2 · Chapter 6 · Question 3 of 45
According to standard corporate finance rules, an independent investment project should generally be accepted if its Net Present Value (NPV) is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Positive (greater than zero)
Explanation
A positive NPV indicates that the projected earnings generated by a project or investment (in present dollars) exceed the anticipated costs (also in present dollars), making it a profitable venture to accept.
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