A profit- maximizing manager should always calculate the net present value and use the net present value rule to evaluate any business decision that involves the payment or receipt of money at different times in the future.

Question

Quizplus · Accepted Answer

The net present value (NPV) is the most accurate method for evaluating a project's profitability. NPV considers the time value of money, which means that money in the present is worth more than the same amount of money in the future. Therefore, a profit-maximizing manager should always calculate the NPV and use the NPV rule to determine whether a project or investment will increase the company's value.

A Profit- Maximizing Manager Should Always Calculate the Net Present