Opportunity Cost Of Capital And Npv. When r 0 npv 30 because then it simply is the profit over one year. A high opportunity cost of capital raises the bar for all other projects as well.
Definition Of Net Present Value Npv Financial Ratios Financial Ratio Definitions Presents from www.pinterest.com
A high opportunity cost of capital raises the bar for all other projects as well. The result is a lower dollar amount the company can compare to the initial cash outlay for a given project. With fv t 180 and pv t 150 here is the graph of npv t r when r varies.
The actual definition of net present value is the current right now present today value of a series of future cash flows.
B what is each projects npv if the opportunity cost of capital is 10 percent 5 from busnies 102 at west chester university. When r 0 npv 30 because then it simply is the profit over one year. Higher opportunity cost lowers npv. The result is a lower dollar amount the company can compare to the initial cash outlay for a given project.
