- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 5. Capital Investments and Capital Allocation
- Subject 2. Capital Allocation

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**CFA Practice Question**

The net present value of a project is ______.

B. the present value of future cash flows minus initial costs

C. the present value of future cash flows netting out those cash flows that occur after the relevant period

D. the present value of future cash flows netting out those cash flows that occur with risk

E. the present value of positive future cash flows

A. all current revenue minus all current costs

B. the present value of future cash flows minus initial costs

C. the present value of future cash flows netting out those cash flows that occur after the relevant period

D. the present value of future cash flows netting out those cash flows that occur with risk

E. the present value of positive future cash flows

Correct Answer: B

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**User Contributed Comments**
1

User |
Comment |
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mattg |
Initial costs occur @ time period 0 so nominal value = present value |