ECONOMICS

Detailed explanation-1: -If a project’s NPV is positive (> 0), the company can expect a profit and should consider moving forward with the investment. If a project’s NPV is neutral (= 0), the project is not expected to result in any significant gain or loss for the company.

Detailed explanation-2: -If the net present value is positive (greater than 0), this means the investment is favorable and may give you a return on your investment. If it’s negative, you may end up losing money over the course of the project. So how do you calculate npv?

Detailed explanation-3: -positive. A project should be accepted whenever the NPV is greater than 0. When the NPV is positive, the project will have generated cash flow, which is more than the cost of investment. Therefore, it means the project is able to recover cost and earn a return or what is commonly called the profit.

Detailed explanation-4: -The decision rule for NPV is to accept the project if the NPV is positive and reject the project if the NPV is NPV is negative. The decision rule for IRR is to accept the project if the IRR equals or is greater than the required rate of return and reject the project if the IRR is less than the required rate of return.