What is the logic behind the NPV capital-budgeting framework?

The net present value (NPV) of a project is a measure of the difference between the project’s value and its cost. The internal rate of return (IRR) is another measure of the project’s attractiveness.

These are by far the two most widely used measures for evaluating the value of capital investment projects.

NPV and IRR are the focus of this discussion assignment. Your response should be one or two paragraphs in length for each of the following questions:

* What is the logic behind the NPV capital-budgeting framework?

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