higher net present value
lower net present value
zero net present value
all of above
✅ The correct answer is A.
In mutually exclusive projects, project which is selected for comparison with others must have higher net present value. A positive net present value indicates that the projected earnings generated by a project or investment – in present dollars – exceeds the anticipated costs, also in present dollars. It is assumed that an investment with a positive NPV will be profitable, and an investment with a negative NPV will result in a net loss.
In mutually exclusive projects, project which is selected for comparison with others must have higher net present value. A positive net present value indicates that the projected earnings generated by a project or investment – in present dollars – exceeds the anticipated costs, also in present dollars. It is assumed that an investment with a positive NPV will be profitable, and an investment with a negative NPV will result in a net loss.