Practice Net Present Value (NPV) - 25.5.B.1 | 25. Capital Budgeting Techniques | Management 1 (Organizational Behaviour/Finance & Accounting)
K12 Students

Academics

AI-Powered learning for Grades 8–12, aligned with major Indian and international curricula.

Professionals

Professional Courses

Industry-relevant training in Business, Technology, and Design to help professionals and graduates upskill for real-world careers.

Games

Interactive Games

Fun, engaging games to boost memory, math fluency, typing speed, and English skills—perfect for learners of all ages.

Typing
Memory
Math
English Adventures
Knowledge

25.5.B.1 - Net Present Value (NPV)

Enroll to start learning

You’ve not yet enrolled in this course. Please enroll for free to listen to audio lessons, classroom podcasts and take practice test.

Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What does NPV stand for?

💡 Hint: Think about how investments are evaluated over time.

Question 2

Easy

Is a positive NPV good or bad?

💡 Hint: Remember, it means you're expected to make more than you spend.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does a positive NPV indicate about a project?

  • The project is not profitable.
  • The project is profitable.
  • Insufficient data.

💡 Hint: Remember the acceptance criteria for NPV.

Question 2

True or False: NPV accounts for the time value of money.

  • True
  • False

💡 Hint: Think about how money's value changes over time.

Solve 1 more question and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company is considering two different projects. Project A has cash inflows of $150,000 for 5 years and requires an initial investment of $400,000. Project B generates cash inflows of $250,000 for 3 years with the same initial investment. If the discount rate is 10%, calculate the NPV for both projects to determine which one the company should accept.

💡 Hint: Carefully break down the cash flows year by year.

Question 2

Assume you estimate future cash flows of $500,000, $600,000, and $700,000 over the next three years for a new project with an initial investment of $1,500,000 and a discount rate of 5%. Calculate the NPV and suggest whether to proceed with this project.

💡 Hint: Calculate each cash inflow's present value to arrive at the total NPV.

Challenge and get performance evaluation