Final Answer:
(C) Investment Proposal C has the highest Net Present Value (NPV), indicating greater profitability compared to other options. This suggests a more financially sound and lucrative investment opportunity.
Step-by-step explanation:
Net Present Value (NPV) is a crucial financial metric used to evaluate the profitability of an investment by comparing the present value of expected cash inflows to the present value of cash outflows.
Among the given investment proposals (A, B, C, D), Investment Proposal C demonstrates the highest NPV. This suggests that, when the future cash flows are discounted to their present value, Proposal C yields a more substantial positive difference compared to the other options.
Investment Proposal C's superior NPV implies that its expected returns exceed the costs of the initial investment and ongoing expenses by a larger margin than the other proposals. This indicates a potentially more lucrative and financially sound investment opportunity.
Investors often prioritize proposals with higher NPVs as they signify a greater potential for profitability and return on investment over time.