To accept a capital project when using NPV:

Question

Quizplus · Accepted Answer

When using NPV, the best choice is to accept a capital project if the NPV is greater than zero. This indicates that the project is expected to generate a positive return and will add value to the firm. If the NPV is less than zero, the project is expected to result in a negative return and will reduce the value of the firm. If the NPV is equal to zero, the project is expected to generate exactly enough return to cover the required investment, but will not add any additional value to the firm.

To Accept a Capital Project When Using NPV