Question 14 (0.5 points) A company is considering the purchase of a new machine

Question

Question 14 (0.5 points) A company is considering the purchase of a new machine for cash. The company is using the net present value method to evaluate this capital expenditure. The machine will be purchased f the sum of the present values of the future net cash flows is lower than the capital investment at the beginning of the project. higher than the capital investment at the heginning of the project. lower than the net income from the project. higher than the net income from the project. 10 11 12 13 14 15 Save

Explanation / Answer

Question : 14

Answer : option (b)

Present values of the future net cash flows is "higher than

the capital investment at the beginning of the project"

Explanation :

Present value of the future net cacash flows is greater than the initial investment shows npv is positive and the proposal investment is considered to be acceptable.

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