The net present value is found by subtracting a project's initial investment from the present value of its cash inflows discounted at a rate equal to the project's internal rate of return.

Question

Quizplus · Accepted Answer

The net present value (NPV) is found by subtracting a project's initial investment from the present value of its cash inflows discounted at the project's cost of capital or discount rate, not necessarily the internal rate of return (IRR).

The Net Present Value Is Found by Subtracting a Project's