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Net Present Value Assignment

   

Added on  2021-04-16

6 Pages1031 Words31 Views
NET PRESENT VALUE1

Table of ContentsIntroduction................................................................................................................................3Attributes That Make NPV Method Reliable.............................................................................4A The capacity of NPV Method to Price Real Options.............................................................5References..................................................................................................................................62

IntroductionCapital budgeting technique is used to analyse capital projects undertaken. Net present valueis one of the most popular capital budgeting techniques. It is used in making the capitalbudgeting decision. The viability of the profitability of any project is decided using thistechnique. The basic rule is that, if a project has resulted in the calculation of positive NPVthen the decision to invest in the same shall turn profitable. But if the project has providednegative NPV, then the decision to invest in the same might lead to losses for the company(Stoiljkovic, 2010)3

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