When a project's net present value exceeds zero, then: a. the project should be accepted b. the project will be acceptable using the payback period method c. the IRR should be calculated to ensure that the project's IRR is less than the cost of capital d. both a and c are true
If a project has a negative NPV, its IRR will always be less than the cost of capital. d. There is never a conflict between NPV and IRR in the case of mutually exclusive projects. e. all of the above are correct D. There is never a conflict between NPV and IRR in the case of mutually exclusive projects. 63.
NPV is greater than zero D. NPV is greater than zero 7. Internal rate of return (IRR) and net present value (NPV) methods: a. generally arrive at the same accept/reject decisions
NPV is greater than zero D. NPV is greater than zero 7. Internal rate of return (IRR) and net present value (NPV) methods: a. generally arrive at the same accept/reject decisions b. are less sophisticated than the payback period c. cannot make use of the same cash flows
When a project's NPV exceeds zero, The project should be accepted without any further consideration, assuming we are confident that the cash flows and the cost of capital have been properly estimated.
Net Present Value (NPV) Net Present Value is the sum of the investment's expected cash inflows and outflows discounted back to their present value at a risk adjusted rate. If the NPV is greater than $0, the project is accepted. Otherwise the project is rejected.
If a project's NPV is neutral (= 0), the project is not expected to result in any significant gain or loss for the company. With a neutral NPV, management uses non-monetary factors, such as intangible benefits created, to decide on the investment.
If the NPV of a project is greater than 0, its PI will equal 0. If the IRR of a project is 0%, its NPV, using a discount rate, k, greater than 0, will be 0. If the PI of a project is less than 1, its NPV should be less than 0. its NPV will be greater than 0.