ECONOMICS

Detailed explanation-1: -If the calculated NPV of a project is negative (< 0), the project is expected to result in a net loss for the company. As a result, and according to the rule, the company should not pursue the project.

Detailed explanation-2: -Net Present Value is the sum of the investment’s expected cash inflows and outflows discounted back to their present value at a risk adjusted rate. If the NPV is greater than $0, the project is accepted.

Detailed explanation-3: -The internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Detailed explanation-4: -Investment should be accepted if the NPV is positive and rejected if NPV is negative. So, when NPV is zero means investment inflows and outflows are equal means no profit or loss so just to invest in this means just to waste time.