Revision 2 – Investment Appraisal - Yola

Net Present Value (NPV) 1.3.1 PV of cash inflows compare with the PV of cash outflows to obtain a NPV. 1.3.2 The discount rate equals its cost of capital or WACC. 1.3.3 Decision rule: NPV > 0, the project is financially viable, i.e. accepted. NPV = 0, the project breaks even. NPV < 0, the project is not financially viable, i.e. rejected. ................
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