Firms can decide whether to undertake a capital investment by applying the net present value(NPV)criterion: Invest if the present value of the expected future cash flows from an investment is larger than the cost of the investment.❑ Firms can decide whether to undertake a capital investment by applying the net present value(NPV) criterion: Invest if the present va1ue of the expected future cash flows from an investment is larger than the cost of the investment