Question

The net present value of a project is ______. the present value of the project’s projected annual tax savings the present value of the project's salvage value used in determining whether or not a project is an acceptable capital investment the difference between the present va

Answer 1

Answer:

Used in determining whether or not a project is an acceptable capital investment

The difference between the present value of cash inflow and cash outflow of a project

Explanation:

Net present value of a project is an investment appraisal tool that is used in determining the value of all future cash flow that will be generated by a project in order to know the project with maximum profit even right from the onset.

The is done by discounting the present and the future cash flow to the present value and the differences highlighted.

One of the key purpose of the net present value of projects is that it points out whether a project will be an acceptable capital investment or not. When the net present value of cash inflow is greater than the cash outflow, it is indicates a profitable project and vice versa.