If an investment has an NPV that is greater than 0; then that investment is a profitable one and should be und

If an investment has an NPV that is greater than 0; then that investment is a profitable one and should be undertaken. true/false? why/why not?

Yes---to an extent.

An investment can have a positive NPV and yet not be a prudent investment.

Consider the mining industry. Presently, metals prices are very high which encourages mining companies to launch new production facilities. However, building a new mine is a long process that incurs high costs in the beginning with no return until the mine comes on line.

So the mining company has to lay out a lot of capital just to get the mine up and running. The NPV might still be positive, but the mining company is going to lay out a lot of money. Is it still worth it? What if the mining company had two prospective projects: a mine in Argentina and one in Australia. Both have positive NPVs but the mining company doesnt have an inexhaustible amount of capital. It might only be able to choose one.

In cases like this, the mining company might look at the implied rate of return, IRR. The mining company's cost of capital could be say, 10%. It could easily say that it will not enter into a new project unless its IRR exceeds its cost of capital. That way the company's cash flows dont get beaten up.

So it is true that a project with a positive NPV is a worthwhile one. But often you cant invest in every project with a positive NPV; you need another metric to help make your decision like IRR.

True. The investment wud add value to the firm!
Its about the time value for money