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the net present value as determined by normal discount rate is 10%

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the net present value as determined by normal discount rate is 10%

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Net present value method has value adding-up property

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Exchange of benefits in applying the net present value method

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cash method is when you get cash, method is when u give it

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Widely used approach for evaluating an investment project. Under the net present value method, the present value (PV) of all cash inflows from the project is compared against the initial investment (I). The net-present-valuewhich is the difference between the present value and the initial investment (i.e., NPV = PV - I ), determines whether the project is an acceptable investment. To compute the present value of cash inflows, a rate called the cost-of-capitalis used for discounting. Under the method, if the net present value is positive (NPV > 0 or PV > I ), the project should be accepted.

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