question archive A market is in equilibrium when present values are nil and net present values are positive
A market is in equilibrium when present values are nil and net present values are positive
Subject:FinancePrice:2.87 Bought7
A market is in equilibrium when present values are nil and net present values are positive. True or false?
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Answer:
Net present value is the difference between future cash flows and present investment. When market is equilibrium that means this Net present value is zero and present values of future cash flows are positive.
Hence above statement is false.
