A project should be accepted under the NPV rule if:
ANPV < 0
BNPV > 0
CNPV = 0
DNPV equals IRR
Answer & Solution
Correct answer: B. NPV > 0
1. NPV > 0 ⇒ project adds shareholder wealth.
2. NPV = 0 ⇒ break-even with the cost of capital.
3. NPV < 0 ⇒ destroys value, reject.
_Source: ICAI BoS CA Inter Paper 6A, Ch 7 "Investment Decisions", §7_