alleryStart learning →Net present value is the present value of the cash inflows less the present value of:
ACash outflows
BBank branches
CBoard members
DStock brokers
Answer & Solution
Correct answer: A. Cash outflows
1. Every project has money going out as well as money coming in.
2. Both streams are pulled back to today before they are compared.
3. The difference between those two present values is net present value.
4. So the amount subtracted is the present value of the cash outflows.
_Source: OpenStax Principles of Finance (CC BY 4.0), Ch 16 'How Companies Think about Investing', sections 16.1-16.5_
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