What is the net present value of an investment, and how do you calculate it?

What is the net present value of an investment, and how do you calculate it?




Answer: The NET PRESENT VALUE of a project measures the difference between its value and cost. NPV is therefore the amount that the project will add to shareholder wealth. A company maximizes shareholder wealth by accepting all projects that have a positive NPV.

Comments

Popular posts from this blog

Discuss the seven characteristics of useful information.

Why have accounting software packages been designed with separate transaction modules?

A laboratory assistant prepared solution of 0.8 M, 0.6 M, 0.4 M, and 0.2 M sucrose, but forgot to label them. After realizing the error, the assistant randomly labeled the flasks containing these four unknown solutions as flask A, flask B, flask C, and flask D.