Hi sir. Thank you for the lecture. Please may I ask, if the NPV is only +1, or +2, which is a small positive figure (very near to zero), is the project still acceptable by the company? Or is there any other comments regarding this situation?
Thank you. :)
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Query about "Discounted cash flow techniques (part 3) – ACCA (AFM) lectures"
4y ago#1It is very unlikely that the company would accept the project because the cash flows are only ever estimates and so it is too risky that the NPV would end up being negative. If possible then they might do more work to get more reliable estimates but probably not because of the costs involved .
Oh I see. Thank you.
4y ago#3You are welcome.
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