NPV = Present value of inflows − Present value of outflows
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2.3. Applying the Cost of Capital to Capital Budgeting and Security Valuation between the present value of the cash inflows, discounted at the opportunity cost of capital applicable to the specific project, and the present value of the cash outflows, discounted using that same opportunity cost of capital:
<span>NPV = Present value of inflows − Present value of outflows
If an investment’s NPV is positive, the company should undertake the project. If we choose to use the company’s WACC in the calculation of the NPV of a project, we are assu
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