Asked by jayden pineda on May 12, 2024
Verified
Using the net present value method a net present value of zero indicates that the project would be acceptable.
Net Present Value
A method used in capital budgeting to assess the profitability of an investment or project by calculating the present value of its expected cash flows minus the initial investment cost.
- Comprehend the techniques and significance of capital budgeting in making investment choices.
Verified Answer
EO
Ester OrasmaMay 17, 2024
Final Answer :
True
Explanation :
A net present value (NPV) of zero indicates that the project's cash flows are exactly sufficient to repay the invested capital and provide the required rate of return, making the project acceptable as it meets the minimum criteria for investment.
Learning Objectives
- Comprehend the techniques and significance of capital budgeting in making investment choices.