B E F 47 Those are the NPV rules. 48 If the NPV is positive, the IRR is greater than the discount rate and the investment meets -49 our criteria, and so on. (L5-4) 50 51 But be careful, it is a common misconception that negative NPV means the investor is losing money. 52 That is not the case. 53 Recall that our negative NPV resulted from a purchase price of $1,100,000. But, if we simply add up all of the 54 future cash flows without discounting them we see that our purchase price of $1,100,000 was offset by 55 total income of $1,880,000. So, the negative NPV does not mean we lost money. 56 (We actually earned about 13.38%!) -57 58 What do ou think a negative IRR means? -59