If in evaluating a proposal by use of the net present value method there is a deficiency of the present value of future cash inflows over the amount to be invested, the proposal should be rejected.

Question

Quizplus · Accepted Answer

If the net present value of a proposal is negative, it means that the present value of the expected cash inflows is less than the amount invested. This indicates that the proposal is not likely to generate sufficient returns to cover the investment and should be rejected.

If in Evaluating a Proposal by Use of the Net