One should invest in an opportunity if the:
A)present value of the costs exceeds the present value of the benefits.
B)present value of the benefits exceeds the present value of the costs.
C)nominal interest rate is equal to the inflation rate.
D)inflation rate exceeds the nominal interest rate.

Question

Quizplus · Accepted Answer

The present value of the benefits should always exceed the present value of the costs in order to make an investment profitable. This is the basic principle of investment analysis. The nominal interest rate and inflation rate are not directly related to the profitability of the investment.

One Should Invest in an Opportunity If The