Which one of the following changes offers the greatest chance of changing a project's NPV from negative to positive?

Question

Quizplus · Accepted Answer

Reducing the risk of the project is the best choice because it has the potential to increase cash flows and decrease the discount rate used to calculate the NPV. This can lead to a significant increase in the project's NPV, potentially changing it from negative to positive. Substituting preferred stock for debt or reducing the maturity of the debt may also have an impact on the project's NPV, but it may not be as significant as reducing the project risk. Selling the debt at less than par value may have a negative impact on the project's finances and is not likely to improve its NPV.

Which One of the Following Changes Offers the Greatest Chance