Accepting positive NPV projects beneﬁts the shareholders because:
A)it is the most easily understood valuation process.
B)the present value of the expected cash ﬂows are equal to the cost.
C)the present value of the expected cash ﬂows are greater than the cost.
D)it is the most easily calculated.
E)None of the above.

Question

Quizplus · Accepted Answer

Accepting positive NPV projects means that the present value of the expected cash flows from the project is greater than the cost of the project. This is beneficial for shareholders because it increases the overall value of the company and potentially leads to higher returns on investment.

Accepting Positive NPV Projects Beneﬁts the Shareholders Because