Asked by Shreyanth varghese on Sep 23, 2024

​If the interest is 5%,should the firm undertake the investment?

A) ​Yes,since NPV=0
B) Yes,since NPV<0
C) Yes,since NPV>0
D) ​No,since NPV=0

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time.

Interest Rate

The proportion of a loan charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

  • Acquire knowledge on the concept of Net Present Value (NPV) and how to calculate it.
  • Compute the current worth of monetary inflows resulting from an investment.