Net Present Value Is Defined as the Difference Between the Present

question 137

True/False

Net present value is defined as the difference between the present value of the project's cash inflows and the investment's cost.

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Definitions:

Return On Investment

A measure used to evaluate the efficiency of an investment or compare the efficiency of several different investments, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Performance Measure

Indicators used to evaluate the efficiency, effectiveness, or success of an organization or individual in achieving objectives.

Project Rejection

The process of declining to move forward with a project after evaluating its feasibility, risks, and potential returns.

Operating Asset

An asset used in the daily operations of a business that contributes to generating income.