If the discount rate is appropriate for the level of risk, a satisfactory investment will have a present value of benefits equal to or greater than than the present value of costs.

Question

Quizplus · Accepted Answer

The present value of benefits must be equal to or greater than the present value of costs for an investment to be considered satisfactory, as this indicates the investment covers its costs and potentially provides additional value, taking into account the appropriate discount rate for the level of risk.

If the Discount Rate Is Appropriate for the Level of Risk