The basic investment rule of NPV. Introduction: The net present value is the difference between the market value of an investment and the cost of the investment.

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Answer 1

Question

Chapter 8, Problem 8.1C

Summary Introduction

To discuss: The basic investment rule of NPV.

Introduction:

The net present value is the difference between the market value of an investment and the cost of the investment.

Expert Solution & Answer

Explanation of Solution

The basic rules of net present value are as follows:

If the computed net present value is positive, then the investment must be accepted.
If the computed net present value is negative, then the investment must be rejected.

Pictorial representation:

The rule of net present value is shown in the diagram below:

Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate), Chapter 8, Problem 8.1C

Conclusion

The computation of net present value is used to assess the investment, which in turn, is utilized to identify the profitability in a proposed investment.

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Answer 2

Question

Chapter 8, Problem 8.1C

Summary Introduction

To discuss: The basic investment rule of NPV.

Introduction:

The net present value is the difference between the market value of an investment and the cost of the investment.

Expert Solution & Answer

Explanation of Solution

The basic rules of net present value are as follows:

If the computed net present value is positive, then the investment must be accepted.
If the computed net present value is negative, then the investment must be rejected.

Pictorial representation:

The rule of net present value is shown in the diagram below:

Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate), Chapter 8, Problem 8.1C

Conclusion

The computation of net present value is used to assess the investment, which in turn, is utilized to identify the profitability in a proposed investment.

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Answer 3

Question

Chapter 8, Problem 8.1C

Summary Introduction

To discuss: The basic investment rule of NPV.

Introduction:

The net present value is the difference between the market value of an investment and the cost of the investment.

Expert Solution & Answer

Explanation of Solution

The basic rules of net present value are as follows:

If the computed net present value is positive, then the investment must be accepted.
If the computed net present value is negative, then the investment must be rejected.

Pictorial representation:

The rule of net present value is shown in the diagram below:

Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate), Chapter 8, Problem 8.1C

Conclusion

The computation of net present value is used to assess the investment, which in turn, is utilized to identify the profitability in a proposed investment.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 8, Problem 8.1C

Summary Introduction

To discuss: The basic investment rule of NPV.

Introduction:

The net present value is the difference between the market value of an investment and the cost of the investment.

Expert Solution & Answer

Explanation of Solution

The basic rules of net present value are as follows:

If the computed net present value is positive, then the investment must be accepted.
If the computed net present value is negative, then the investment must be rejected.

Pictorial representation:

The rule of net present value is shown in the diagram below:

Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate), Chapter 8, Problem 8.1C

Conclusion

The computation of net present value is used to assess the investment, which in turn, is utilized to identify the profitability in a proposed investment.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 8, Problem 8.1C

Summary Introduction

To discuss: The basic investment rule of NPV.

Introduction:

The net present value is the difference between the market value of an investment and the cost of the investment.

Expert Solution & Answer

Explanation of Solution

The basic rules of net present value are as follows:

If the computed net present value is positive, then the investment must be accepted.
If the computed net present value is negative, then the investment must be rejected.

Pictorial representation:

The rule of net present value is shown in the diagram below:

Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate), Chapter 8, Problem 8.1C

Conclusion

The computation of net present value is used to assess the investment, which in turn, is utilized to identify the profitability in a proposed investment.

Answer 6

Chapter 8, Problem 8.1C

Summary Introduction

To discuss: The basic investment rule of NPV.

Introduction:

The net present value is the difference between the market value of an investment and the cost of the investment.

Expert Solution & Answer

Explanation of Solution

The basic rules of net present value are as follows:

If the computed net present value is positive, then the investment must be accepted.
If the computed net present value is negative, then the investment must be rejected.

Pictorial representation:

The rule of net present value is shown in the diagram below:

Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate), Chapter 8, Problem 8.1C

Conclusion

The computation of net present value is used to assess the investment, which in turn, is utilized to identify the profitability in a proposed investment.

Answer 7

Chapter 8, Problem 8.1C

Summary Introduction

To discuss: The basic investment rule of NPV.

Introduction:

The net present value is the difference between the market value of an investment and the cost of the investment.

Answer 8

Expert Solution & Answer

Explanation of Solution

The basic rules of net present value are as follows:

If the computed net present value is positive, then the investment must be accepted.
If the computed net present value is negative, then the investment must be rejected.

Pictorial representation:

The rule of net present value is shown in the diagram below:

Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate), Chapter 8, Problem 8.1C

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Conclusion

The computation of net present value is used to assess the investment, which in turn, is utilized to identify the profitability in a proposed investment.

Answer 12

Ch. 8.1 - Prob. 8.1ACQ Ch. 8.1 - Prob. 8.1BCQ Ch. 8.2 - Prob. 8.2ACQ Ch. 8.2 - Prob. 8.2BCQ Ch. 8.3 - Prob. 8.3ACQ Ch. 8.3 - What are the weaknesses of the AAR rule?Ch. 8.4 - Prob. 8.4ACQ Ch. 8.4 - Prob. 8.4BCQ Ch. 8.5 - What does the profitability index measure?Ch. 8.5 - Prob. 8.5BCQ

The basic investment rule of NPV. Introduction: The net present value is the difference between the market value of an investment and the cost of the investment.

To discuss: The basic investment rule of NPV. Introduction: The net present value is the difference between the market value of an investment and the cost of the investment.

Explanation of Solution

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Chapter 8 Solutions

To discuss: The basic investment rule of NPV.

Introduction:

The net present value is the difference between the market value of an investment and the cost of the investment.