If a firm considering the purchase of an asset determines that the asset's net present value is greater than zero, then _____ the asset will _____ profits.
A)not buying; increase
B)purchasing; increase
C)purchasing; decrease
D)not buying; decrease

Question

Quizplus · Accepted Answer

If the net present value of the asset is greater than zero, it means that the benefits of owning the asset outweigh the costs, and therefore purchasing the asset will lead to an increase in profits.

If a Firm Considering the Purchase of an Asset Determines