Suppose you determine that the NPV of a project is $1,525,855. What does that mean? - 9276

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

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

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

 
Solution Description

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