Net Present Value (NPV) analysis accepts projects when:

A NPV is negative

B NPV is positive, meaning the project generates value above the required return

C NPV equals zero

D IRR exceeds 100%

✓ Correct Answer: Option B

NPV > 0: project returns exceed the required rate (cost of capital) → accept. NPV = 0: meets required return. NPV < 0: returns are insufficient → reject.

💡 Why is B) the correct answer?

The correct answer to the question "Net Present Value (NPV) analysis accepts projects when:" is Option B: NPV is positive, meaning the project generates value above the required return.

The other options — A) NPV is negative, C) NPV equals zero, D) IRR exceeds 100% — are incorrect for this Pre-MBA Exam Prep question. As explained above: NPV > 0: project returns exceed the required rate (cost of capital) → accept. NPV = 0: meets required return. NPV < 0: returns are insufficient → reject.

📚 About This Pre-MBA Exam Prep Practice Question

This 2-level Pre-MBA Exam Prep question from the Finance topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free Pre-MBA Exam Prep practice test or use flashcards for spaced repetition review.

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Net Present Value (NPV) analysis accepts projects when:

✓ Correct Answer: Option B

📚 About This Pre-MBA Exam Prep Practice Question

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