Question: In capital budgeting, what does NPV stand for?
Options:
Net Profit Value
Net Present Value
Net Payment Value
Net Profit Variance
Correct Answer: Net Present Value
Solution:
NPV stands for Net Present Value, which is the difference between the present value of cash inflows and outflows.
In capital budgeting, what does NPV stand for?
Practice Questions
Q1
In capital budgeting, what does NPV stand for?
Net Profit Value
Net Present Value
Net Payment Value
Net Profit Variance
Questions & Step-by-Step Solutions
In capital budgeting, what does NPV stand for?
Step 1: Understand that NPV is an abbreviation.
Step 2: Learn that NPV stands for Net Present Value.
Step 3: Know that Net Present Value is a financial concept used in capital budgeting.
Step 4: Recognize that NPV calculates the difference between cash inflows (money coming in) and cash outflows (money going out).
Step 5: Remember that NPV helps determine if an investment is profitable.
Net Present Value (NPV) – NPV is a financial metric used in capital budgeting to assess the profitability of an investment by calculating the difference between the present value of cash inflows and outflows.
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