Net present value is the difference between the market value of a project and it

Question

Net present value is the difference between the market value of a project and its cost. The market value is determined by:

• • Comparison to a similar project.
  • An appraisal.
  • Adding the project's future cash inflows together.
  • Discounting the project's estimated cash flows at the required rate of return.
  selectComparison to a similar project.An appraisal.Adding the project's future cash inflows together.Discounting the project's estimated cash flows at the required rate of return.

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Net present value is the difference between the market value of a project and its cost. The market value is determined by:

• Comparison to a similar project.
• An appraisal.
• Adding the project's future cash inflows together.
• Discounting the project's estimated cash flows at the required rate of return.

selectComparison to a similar project.An appraisal.Adding the project's future cash inflows together.Discounting the project's estimated cash flows at the required rate of return.

• Comparison to a similar project.
• An appraisal.
• Adding the project's future cash inflows together.
• Discounting the project's estimated cash flows at the required rate of return.

Explanation / Answer

Discounting the project's estimated cash flows at the required rate of return.

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