The correctness of decision by the company. Introduction: The decision-related to the investment for long run is called capital budgeting. Capital budgeting includes the investment in the heavy machinery and information technology. Net Present Value (NPV): The net present value is a differential amount of the net cash inflow from future investments and net cash outflow in the form of cost that the company has to pay at present as initial cost of the investment.

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Chapter 7, Problem 21QP

Summary Introduction

To identify: The correctness of decision by the company.

Introduction:

The decision-related to the investment for long run is called capital budgeting. Capital budgeting includes the investment in the heavy machinery and information technology.

Net Present Value (NPV):

The net present value is a differential amount of the net cash inflow from future investments and net cash outflow in the form of cost that the company has to pay at present as initial cost of the investment.

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