Explain Net Present Value within a Project Appraisal
I need to understand how to apply the Net Present Value to a scheme and discuss its findings.
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10 April 2013
This explanation is very comprehensive
10 April 2013
In terms of discussing findings, your discount rate will reflect your cost of capital. If the project returns a positive NPV, then it will exceed the organisations cost of capital, and is worth further consideration (in non-financial terms). If it has a negative NPV, then in financial terms it wont help meet the cost of capital, and would need to be justified entirely in non-financial terms. Projects like health and safety often return negative NPV's, yet are undertaken by organisations anyway, often because there is a legal requirement to do so.
10 April 2013
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