Question

To avoid accepting projects that actually should be rejected, a company should ignore intangible benefits in calculating net present value.

a. True

b. False

Answer 1

Answer:

false

Explanation:

Net present value is the present value of after-tax cash flows from an investment less the amount invested.  

Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.  

When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.

Monetary amounts should be allocated to intangible benefits and incorporated into the calculation of NPV