Suppose you determine that the NPV of a project is $1,525,855. - 1431

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Suppose you determine that the NPV of a project is $1,525,855. What does that mean?

          a.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.

          b.   The project would add value to the firm.

          c.   Under all conditions, the project’s payback would be less than the profitability index.

          d.   The project’s IRR would have to be less that the firm’s discount rate.

Solution Description

Suppose you determine that the NPV of a project is $1,525,855. What does that mean?