Which statement concerning the net present value (NPV) of an investment or a fin

Question

Which statement concerning the net present value (NPV) of an investment or a financing project is correct? A financing project should be accepted if, and only if, the NPV is exactly equal to zero. Any type of project with greater total cash inflows than total cash outflows, should always be accepted. An investment project should be accepted only if the NPV is equal to the initial cash flow. Any type of project should be accepted if the NPV is positive and rejected if it is negative. An investment project that has positive cash flows for every time period after the initial investment should be accepted.

Explanation / Answer

Correct statement is D.

A project should be accepted if the NPV is positive and rejected if NPV of the project is negative. Which mean that the return is higher than the discounting rate.

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