3. Finance and Accounts

Net Present Value — Quiz

Test your understanding of net present value with 5 practice questions.

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Practice Questions

Question 1

What does $\text{Net Present Value (NPV)}$ measure in investment appraisal?

Question 2

Which statement best explains why future cash flows are discounted when calculating $\text{NPV}$?

Question 3

A project has an initial cost of $1000$ and a present value of future cash inflows of $1200$. What is the $\text{NPV}$?

Question 4

If a project has a negative $\text{NPV}$, what is the best conclusion?

Question 5

Which item is most important in calculating $\text{NPV}$?
Net Present Value Quiz — IB Business Management HL | A-Warded