Net Present Value

question 1

Multiple Choice

Net present value

• A) Divides investment by average cash inflow to determine if a capital expenditure should be made
• B) Discounts and totals cash inflows and subtracts the investment to determine if a capital expenditure should be
• C) Discounts and totals cash inflows and divides by the investment to determine if a capital expenditure should be made
• D) Calculates the discount rate that equates the present value of the cash inflows with the initial investment to determine if a capital expenditure should be made

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