Projects that are calculated as having negative NPVs should be:
A)Depreciated over a longer time period
B)Charged less in overhead costs
C)Discounted using lower rates
D)Rejected or abandoned

Question

Quizplus · Accepted Answer

Projects that have negative NPVs are expected to result in a loss of value for the organization. Therefore, it is prudent to reject or abandon such projects rather than pursue them. Depreciating them over a longer period or charging less in overhead costs would only delay the realization of the loss, not prevent it. Similarly, discounting them using lower rates would not change the fact that they are expected to result in a negative return.

Projects That Are Calculated as Having Negative NPVs Should Be