A negative net present value means that the:
A) Internal rate of return is less than the required rate of return
B) Project is acceptable
C) Present value of the inflows exceeds the present value of the outflows
D) Company chose the wrong discount rate

Question

Quizplus · Accepted Answer

A negative net present value indicates that the present value of the outflows exceeds the present value of the inflows, meaning the project is not expected to generate enough cash flow to cover its costs and earn a return greater than the required rate of return. Therefore, the internal rate of return is less than the required rate of return.

A Negative Net Present Value Means That The