The net present value of an investment proposal is found by adding the present values of all of its estimated future cash flows and subtracting the initial cost of the investment from the sum.

Question

Quizplus · Accepted Answer

This is the correct formula for calculating the net present value (NPV) of an investment proposal. NPV helps to determine whether an investment is viable by comparing the present value of expected future cash flows to the initial cost of the investment.

The Net Present Value of an Investment Proposal Is Found