A proposed project has a positive net present value.If this project is accepted,then:
A)the firm made an incorrect accept/reject decision.
B)shareholder wealth will increase.
C)shareholder wealth will remain constant.
D)the value of the firm will decrease.
E)the value of the firm will remain constant.

Question

Quizplus · Accepted Answer

A positive net present value indicates that the project will generate more cash inflows than outflows, resulting in an increase in shareholder wealth. Therefore, accepting the project will be beneficial for the firm and its shareholders.

A Proposed Project Has a Positive Net Present Value