Cash outflows are treated as negative cash flows

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Reference no: EM131910301

CFt is the expected cash flow at Time t, r is the project's risk-adjusted cost of capital, and N is its life, and cash outflows are treated as negative cash flows. The NPV calculation assumes that cash inflows can be reinvested at the project's risk-adjusted (rd/rs/WACC/). When the firm is considering independent projects, if the project's NPV exceeds zero the firm should (accept/reject) the project. When the firm is considering mutually exclusive projects, the firm should accept the project with the (lowest positive/lowest negative/highest positive/highest negative) NPV.

Reference no: EM131910301

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