Accepting a project with a ________ NPV makes the firm worse off financially because the cost of the investment exceeds the ________.
A) positive; present value of future benefits
B) negative; present value of future cash flows
C) negative; present value of present cash flows
D) positive; present value of present cash flows

Question

Quizplus · Accepted Answer

Accepting a project with a negative Net Present Value (NPV) means the present value of future cash flows generated by the project is less than the initial investment cost, making the firm financially worse off.

Accepting a Project with a ________ NPV Makes the Firm