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a. the present value of all net cash flows that result from the project.
b. the present value of all revenues minus the present value of all costs that result from the project.
c. the present value of all future net cash flows that result from the project minus the initial investment required to start the project.
d. All of the above are correct.
The correct answer is item C
The NPV of a project or investment reflects the degree to which cash inflow, or revenue, equals or exceeds the amount of investment capital required to fund it. When assessing multiple projects, businesses use NPV as a way of comparing their relative profitability to ensure that only the most lucrative ventures are pursued. A higher NPV indicates that the project or investment is more profitable.
To calculate NPV, the estimated cash outflow and inflow for each period must be established, as well as the expected discount rate. Though the exact figures can only be known after completion, fair estimates can be made by looking at the performance of similar projects or investments.
NPV = ∑ {Net Period Cash Flow/(1+R)^T} - Initial Investment
where R is the rate of return and T is the number of time periods.
d. All of the above are correct.
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*****d. All of the above are correct.****is the answer. Thanks.
..................d. All of the above are correct. ........................................
NPV is equal to present value of cash flows less net cost of investment.
d. All of the above are correct
The net present value of a project is equal to:?
One. The present value of all net cash flows arising from the project.
B. The present value of all revenues minus the present value of all costs arising from the project.
C. The present value of all future net cash flows arising from the project minus the initial investment required to start the project.
D. All of the above are correct.
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