Practice mode Finance

If a project’s cash flows are worth less than the capital invested at the required rate of return, what will its net present value be?

Correct answer A. Negative

Explanation

NPV is the present value of inflows minus the investment, so when discounted inflows fall short of the outlay, NPV is negative.

Report a problem

Answer checked How we write and check questions

Tip: press A, B, C or D to answer, and N for the next question.

Advertisement

Have a question about this answer?

Your email address will not be published. Required fields are marked *

Links and website addresses are not allowed in comments.