What does NPV help evaluate regarding investments?

NPV, or Net Present Value, is a financial metric used to assess the profitability of an investment by calculating the present value of expected future cash flows and subtracting the initial investment. This method allows investors to determine whether the projected earnings from an investment, when adjusted for time and risk, exceed the costs associated with it.

By considering future cash flows and applying a discount rate that reflects the risk of those cash flows, NPV provides a clear picture of an investment's value over time. A positive NPV indicates that the investment is expected to generate more wealth than it costs, making it a desirable opportunity. Thus, option C accurately captures the essence of what NPV seeks to evaluate in terms of financial decision-making and investment appraisal.