The decision rule for net present value is to:
A) accept all projects with cash inflows exceeding initial cost.
B) reject all projects with rates of return exceeding the opportunity cost of capital.
C) accept all projects with positive net present values.
D)reject all projects lasting longer than 10 years.

Question

Quizplus · Accepted Answer

The decision rule for net present value is to accept all projects with positive net present values. This means that the expected cash inflows should be greater than the initial investment required to undertake the project. The other options listed are not accurate decision rules for NPV.

The Decision Rule for Net Present Value Is To