Positive NPV in project appraised by a firm may not occur on account of ______.

economics of scale

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market reach

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product differentiation

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intangible benefits

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Solution

The correct option is B intangible benefits
Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting to analyze the profitability of a projected investment or project.
The purpose of net present value is to help analysts and managers decide whether or not new projects are financially viable. Essentially, net present value measures the total amount of gain or loss a project will produce compared to the amount that could be earned simply by saving the money in a bank or investing it in some other opportunity that generates a return equal to the discount rate. If a long-term project has a positive net present value, then it is expected to produce more income than what could be gained by earning the discount rate, which means the company should go ahead with the project.
Positive NPV in project appraised by a firm occurs mostly on account of tangible benefits.

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