The NPV decision criteria states that for a project to be ac

The \"NPV\" decision criteria states that for a project to be acceptable, its NPV should be greater than A) 1 B) zero C) its cost of capital D) its IRR

Solution

The NPV decision criteria says that project should be accepted when there is a positive NPV.

When NPV is more than zero then it means that the NPV is positive and then only project will be accepted.

When NPV is less than zero then it means NPV is negative and hence project should be rejected.

IRR is rate at which NPV is zero.

So NPV should be greater than zero for project to be aceptable.

So correct answer is B) zero