Certified Chief Information Security Officer (CCISO) — Question 123

If the result of an NPV is positive, then the project should be selected. The net present value shows the present value of the project, based on the decisions taken for its selection. What is the net present value equal to?

Answer options

• A. Net profit ג€" per capita income
• B. Total investment ג€" Discounted cash
• C. Average profit ג€" Annual investment
• D. Initial investment ג€" Future value

Correct answer: B

Explanation

The correct answer is B, as the net present value is calculated by subtracting the discounted cash flows from the total investment. The other options do not accurately reflect the relationship between NPV and investment, as they mix unrelated financial concepts.