Unfortunately, this basic principle is often wrong. Although the NPV rule is relatively easy to apply, it is built on faulty assumptions. It assumes one of two things: either that the investment is reversible (in other words, that it can somehow be undone and the expenditures recovered should market conditions turn out to be worse than anticipated); or that, if the investment is irreversible, it is a now-or-never proposition (if the company does not make the investment now, it will lose the opportunity forever).