The primary reason that company projects with positive net present values are considered acceptable is that:

A) They create value for the owners of the firm.
B) The project's rate of return exceeds the rate of inflation.
C) They return the initial cash outlay within three years or less.
D) The required cash inflows exceed the actual cash inflows.
E) The investment's cost exceeds the present value of the cash inflows.

Net Present Values

The calculation of the present value of an investment's expected cash flows minus the initial investment cost.

Positive NPV

Refers to a net present value calculation indicating that the projected earnings (discounted back to their present value) exceed the initial investment.

Firm Owners

Individuals or entities that hold an ownership interest in a company, representing their claim on the company's assets and earnings.