Which of the following is NOT correct?
A) NPV is one of the two or three most important concepts in finance.
B) NPV is always just the difference between the market value of an asset or project and its cost.
C) The financial manager acts in the shareholders' best interests by identifying and taking positive NPV projects.
D) NPV's can normally be directly observed in the market.
E) Investment criteria other than NPV provide additional information about whether or not a project truly has a positive NPV.

Question

Quizplus · Accepted Answer

NPV (Net Present Value) cannot normally be directly observed in the market because it is a calculation based on estimates of future cash flows, discount rates, and the initial investment. Market values are influenced by many factors and do not directly reveal the NPV of an investment or project.

Which of the Following Is NOT Correct