The primary reason that company projects with positive net present values are considered acceptable is that:
A)they create value for the owners of the ﬁrm.
B)the project's rate of return exceeds the rate of inﬂation.
C)they return the initial cash outlay within three years or less.
D)the required cash inﬂows exceed the actual cash inﬂows.
E)the investment's cost exceeds the present value of the cash inﬂows.

Question

Quizplus · Accepted Answer

The primary reason that company projects with positive net present values are considered acceptable is that they create value for the owners of the firm. This means that the project has generated more cash inflows than outflows, leading to an increase in the company's overall wealth. A positive net present value indicates that the project is expected to generate cash inflows that are greater than the cost of the initial investment, leading to an increase in the value of the company.

The Primary Reason That Company Projects with Positive Net Present