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Running head: FINANCE QUESTION 1 1 Finance question 1 Name Institution Date
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FINANCE QUESTION 1 2 Memo To: Management From: Student’s Name Date: 27 th November, 2018 Subject: Corporate Finance NPV means the net present value and it defines the difference between the present cost/expense values of a specific project with the cash inflows. The net present value is usually used in the decision-making process and during the assessment of the viability of a certain investment before starting it. Before the implementation of the investment asset within a given organization, the management should always evaluate the project in order to ensure that it will register positive returns to the company. When the value of the net present value is above zero, it indicates that the investment will register a positive return. This is because the net cash inflows of the given project exceed the expenses incurred. Likewise, when the value of the net present value is below zero, it shows that the project will register a loss. This is because expenses exceed
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