--%>

NPV capital budgeting framework

Specify intuition behind NPV capital budgeting framework?

E

Expert

Verified

NPV framework is technique of discounted cash flow.  This methodology compares the present value of all cash inflows related with proposed project versus the present value of all project outflows. In case inflows are enough in order to cover all the operating costs and financing costs, project adds wealth to shareholders.

   Related Questions in Financial Accounting

  • Q : Operation of currency forward and

    Describe basic differences between operation of a currency forward market and a futures market.

  • Q : Causes of current account deficits

    United States has experienced constant current account deficits since early 1980s. List some of the major causes of the deficits? What could be the consequences of these constant U.S. current account deficits?

  • Q : Meso and Macro level theories of

    Identify and elucidate three meso- and/or macro-level theories about deviance.

  • Q : Workings and nature of the financial

    Assume that you are really interested in investing in the shares of Nokia Corporation of Finland that is a world leader in the wireless communication. However, before making the investment decision, you might like to learn about company. Take a look of the website of

  • Q : Explain Cost of goods Explain Cost of

    Explain Cost of goods and how they are used in estimating gross profit and net profit of the business?

  • Q : Report on Business memo analyzing

    Write a Report on Business memo analyzing monthly sales of a company. Try to explain it with graphs.

  • Q : Architectural Symbolism-house-style

    Wriet a report on the term Architectural Symbolism:a study of house-style meanings ?

  • Q : Accounting Treatment of Expenditures

    Describe the term Accounting Treatment of Expenditures? Why it is used.

  • Q : Non-tradable asset Assume there is

    Assume there is non-tradable asset along with the perfect positive correlation with a portfolio T of the tradable assets.  How will non-tradable asset be priced?

  • Q : Proceeds on disposal The following

    The following information is taken from the financial statements of an entity: 20x4 20x3 Property, plant and equipment $4,600,000 $4,200,000 Accumulated depreciation (1,800,000) (1,350,000) Depreciation expense 560,000 Gain on disposal of PPE 65,000 The asset disposed of had a cost