Positive NPV projects most often occur because:
A)analysts select sufficiently low discount rates.
B)most projects are unique and innovative.
C)cash-flow projections are extended into the future.
D)of competitive advantages held by firms.

Question

Quizplus · Accepted Answer

Positive NPV projects most often occur because of competitive advantages held by firms. This means that the project is expected to generate cash flows that exceed the required return on investment due to factors like economies of scale, unique technology, or brand reputation. This competitive advantage allows the firm to earn more profits than their competitors, leading to positive NPV projects. The other choices are not necessarily the main reasons for positive NPV projects.

Positive NPV Projects Most Often Occur Because