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Homework answers / question archive / When the present value of the cash inflows exceeds the initial cost of a project, then the project should be Group of answer choices: Rejected because the internal rate of return is negative Accepted because NPV > 0 Accepted because the profitability index is less than 1
When the present value of the cash inflows exceeds the initial cost of a project, then the project should be
Group of answer choices:
Rejected because the internal rate of return is negative
Accepted because NPV > 0
Accepted because the profitability index is less than 1.
Rejected because NPV>IRR
Option b is correct
NPV is calculated as the present value of cash inflows minus the initial cost.
If present value of cash inflows exceeds initial cost, then the NPV is higher than zero and should be accepted
