Practice mode Finance

In capital budgeting, what does a project with a negative net present value produce?

Correct answer B. Negative economic value added

Explanation

A negative NPV means the project earns less than the cost of capital, so it destroys shareholder wealth, which corresponds to negative economic value added.

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In capital budgeting, what does a project with a negative net present value produce?

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In capital budgeting, what does a project with a negative net present value produce?

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