Which one of the following would make a project unacceptable?
A)cash inflow for net working capital at time zero
B)requiring fixed assets that would have no salvage value
C)an equivalent annual cost that exceeds that of an alternative project
D)lack of revenue generation
E)a depreciation tax shield that exceeds the value of the interest expense

Question

Quizplus · Accepted Answer

An equivalent annual cost that exceeds that of an alternative project would make a project unacceptable. This is because it would mean that there is another project that would have a lower cost per year and would provide better returns on investment. Choosing the project with a higher cost would therefore not be a wise financial decision.

Which One of the Following Would Make a Project Unacceptable