Question: Each choice listed below represents a net present value of a potential project. If you were a CFO of a company, which project would you
- Each choice listed below represents a net present value of a potential project. If you were a CFO of a company, which project would you choose? Assume you can only choose one.
a. NPV = $200,000
b. NPV = $500,000
c. NPV=$0
d. NPV = -$100,000
e. In theory, an investor should make any investment with a positive NPV, which means the investment is making money. Similarly, an investor should refuse any option that has a negative NPV because it only subtracts from the value. When faced with multiple investment choices, the investor should always choose the option with the highest NPV.
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