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If a project's net benefit computed on a present value basis—that is, NPV—is positive, then:

If a project's net benefit computed on a present value basis—that is, NPV—is positive, then:

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Answer #1

Answer: We should opt for the project as it is beneficial for us to go for it and implement the plan.

Net present value gives us an objective view regarding the projects feasibility in terms of net money earned in the project. It brings all the future cash flows to present and let us know that will it give us more benefit then money invested in it.

Positive NPV tells the money earned is higher than invested in present value terms.

Present value formula = Cash flow/(1 + discount rate ) ^ ( no of years)

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