If a project's NPV is calculated to be negative what should a project manner do?
A) The discount rate should be decreased.
B) The profitability index should be calculated.
C) The present value of the project cost should be determined.
D) The project should be rejected.

Question

Quizplus · Accepted Answer

A negative NPV indicates that the project would result in a net loss of value, meaning that the costs outweigh the benefits. Therefore, the best course of action would be to reject the project. Reducing the discount rate may improve the NPV, but if the result is still negative, the project is not worth pursuing. The profitability index and present value of project cost are not relevant in this situation as the negative NPV already indicates that the project is not financially viable.

If a Project's NPV Is Calculated to Be Negative What