In order for a manager to correctly decide to postpone an investment until one year into the future,the NPV of the investment should:
A) grow more rapidly than the IRR.
B) grow more rapidly than the cost of capital.
C) not decrease.
)remain stable.

Question

Quizplus · Accepted Answer

The manager should compare the NPV of the investment to the cost of capital. If the NPV is growing more rapidly than the cost of capital, it may be beneficial to proceed with the investment immediately. However, if the NPV is not growing as rapidly as the cost of capital, it may make more sense to delay the investment until it can generate a higher return.

In Order for a Manager to Correctly Decide to Postpone