Asked by
styles mcclain
on Nov 07, 2024Verified
If a project has a net present value equal to zero, then the present value of the cash inflows exceeds the initial cost of the project.
Net Present Value
Net Present Value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
Present Value
The current value of a sum of money or cash flows expected in the future, discounted at a given return rate.
Initial Cost
The upfront expenditure associated with the acquisition of an asset or the launch of a project.
- Understand the concept of Net Present Value (NPV) and its importance in evaluating a project.
Verified Answer
AT
Learning Objectives
- Understand the concept of Net Present Value (NPV) and its importance in evaluating a project.