According to the net present value rule, an investment should be made if:
A) the net present value has no risk.
B) the net present value is greater than the cost of investment.
C) the net present value is less than present value.
D) the net present value is more desired than consumption.
E) the net present value is positive.

Question

Quizplus · Accepted Answer

The net present value (NPV) rule states that an investment should be made if the NPV is positive. This indicates that the present value of future cash flows from the investment exceeds the initial cost, suggesting the investment will generate a profit.

According to the Net Present Value Rule, an Investment Should