The Net Present Value (NPV) Rule Can Be Best Stated

question 216

Multiple Choice

The net present value (NPV) rule can be best stated as:

• A) An investment should be accepted if, and only if, the NPV is exactly equal to zero.
• B) An investment should be rejected if the NPV is positive and accepted if it is negative.
• C) An investment should be accepted if the NPV is positive and rejected if it is negative.
• D) An investment with greater cash inflows than cash outflows, regardless of when the cash flows occur, will always have a positive NPV and therefore should always be accepted.
• E) An investment should be accepted if it equals its depreciation value.

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Definitions:

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