PRC-2 · Chapter 6 · Question 1 of 45
Which of the following definitions accurately describes Net Present Value (NPV) in project appraisal?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The difference between the present value of cash inflows and the present value of cash outflows over a specific period.
Explanation
Net Present Value (NPV) evaluates an investment by discounting all expected future cash inflows and outflows to their present value equivalent, then finding the net difference between them.
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