Financial Planner

Category - Investment Planning

What concept is used to evaluate, rank, and select among various investment projects?
  1. Annuity Due
  2. Future Annuities
  3. Net Present Value
  4. Stream Annuities
Explanation
Answer: C - Net present value is a concept that is used to evaluate, rank, and select among various investment projects. It is the present value of the stream of net cash flows resulting from a project, discounted at the firm’s cost of capital, minus the project’s net investment. The goal is to increase stakeholder wealth.
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