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According to question; the cumulative discounted net cash flow is positive and substantial , if a new project is likely to be rated positively.
What does Cash flow mean?
Cash flow is the net increase or decrease in cash available to a business or individual over a given time period. It is typically measured on a monthly or quarterly basis and is the sum of all cash receipts and cash payments. All sources of money, such as income from operations, investments, and financing activities, are included in cash flow.
What does Investment mean?
The act of committing money or capital to an endeavor with the expectation of gaining additional income or profit is known as investing. Investing typically entails purchasing assets such as stocks, bonds, mutual funds, or real estate in order to generate income or capital appreciation. Investment decisions should be made with an understanding of the risks and rewards.
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Thus the correct question and option available is stated here:
You point out to I.M. Boss, your CEO, that in NPV analysis, a new project is likely to be rated positively if (a) the % cost of capital is much lower than the % Internal Rate of Return, (b) the payback period is reasonable, compared to the project life, and (c)...
the cumulative discounted net cash flow is negative and substantial
the cumulative discounted net cash flow is positive and substantial
the cumulative discounted net cash flow is positive and little
the cumulative discounted net cash flow is zero
the cumulative discounted net cash flow is negative and little
