If the level of sales is less than that calculated as the NPV break-even level, then the:
A)project will break even only in accounting terms.
B)project's NPV will be greater than zero but less than the opportunity cost of capital.
C)project will have a negative NPV.
D)discount rate should be reduced.

Question

Quizplus · Accepted Answer

If the level of sales is less than that calculated as the NPV break-even level, it means that the project's cash inflows are not sufficient to cover its initial investment and operating costs. This results in a negative net present value (NPV) for the project, and thus, choice C is the correct answer. Choices A, B, and D are not accurate in this scenario.

If the Level of Sales Is Less Than That Calculated