A project is accepted under the net present value method when the net present va
ID: 2485992 • Letter: A
Question
A project is accepted under the net present value method when
the net present value is zero or negative.
the purchase price of the asset is less than the present value of net cash inflows.
the total amount of cash inflows exceeds the purchase price of the asset.
the present value of net cash inflows exceeds a predetermined minimum amount.
A.the net present value is zero or negative.
B.the purchase price of the asset is less than the present value of net cash inflows.
C.the total amount of cash inflows exceeds the purchase price of the asset.
D.the present value of net cash inflows exceeds a predetermined minimum amount.
Explanation / Answer
As per the question and A, B, C, D options given a project can be accepted when (C) the total amount of cash inflows exceeds the purchase price of the asset
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