Question

Projects with a zero or positive net present value (NPV) are accepted using the net present...

Projects with a zero or positive net present value (NPV) are accepted using the net present value method. Why is this so?

 Because the company will have the relevant cash flow to pay its debts as, and when, they fall due. Because a non-negative NPV ensures the company will be profitable AND because the company will have the relevant cash flow to pay its debts as, and when, they fall due. Because a non-negative NPV ensures the company will be profitable. Because the return is at least equal to the cost of capital.

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