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When a Project Has a Positive Net Present Value,it Has

question 38

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When a project has a positive net present value,it has a profitability index:


Definitions:

Annual Rate of Return

The ratio of gain or loss on an investment across a span of one year, expressed as a percentage.

Incremental Analysis

An examination of the additional benefits and costs of certain business decisions, focusing on the changes from the current state.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits one could have received by choosing a different option.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

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