Net Present Value (NPV) is different from present value because NPV is the present discounted value...
Net Present Value (NPV) is different from present value because NPV is the present discounted value of benefits net of costs.
True of False?
Homework Answers
Net present value (NPV) = Present value of cash inflows-Present value of cash outflows
NPV evaluates the projects in absolute dollars form. Higher the NPV, higher the firm value. Hence, project with highest NPV will optimise firm value. Hence, when projects are mutually exclusive NPV method should only be used.
Hence, given state is True.
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