The reasons why net present value is an appropriate tool for comparing investments. Introduction: Net present value (NPV): The net present value is a procedure followed to analyze the profitable nature of a project or an investment. It is calculated by reducing the present value of inflow with that of the outflow.

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Chapter 7.S, Problem 11DQ

Summary Introduction

To determine: The reasons why net present value is an appropriate tool for comparing investments.

Introduction:

Net present value (NPV):

The net present value is a procedure followed to analyze the profitable nature of a project or an investment. It is calculated by reducing the present value of inflow with that of the outflow.

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