Question

TRUE OR FALSE: Present Value of Growth Opportunities (PVGO) can only take on a positive value

TRUE OR FALSE: Present Value of Growth Opportunities (PVGO) can only take on a positive value

Homework Answers

Answer #1

This given statement is a false statement because present value of growth opportunities can be used in two scenarios when there are positive net present value method and negative net present value projects as growth model and no growth models respectively.

So there is a No growth model, which calculate the value of negative NPV projects so thethe given statement is false because it says that present value of growth opportunities can only be used in positive npv projects.

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