Which of the following should be assumed about a project that requires a $100,000 investment at time-period zero,then returns $20,000 annually for 5 years?
A) The NPV is negative.
B) The NPV is zero.
C) The profitability index is 1.0.
D)The IRR is negative

Question

Quizplus · Accepted Answer

The NPV is negative because the total cash inflow of $100,000 over 5 years does not exceed the initial investment of $100,000, assuming a positive discount rate.

Which of the Following Should Be Assumed About a Project