A Project Analysis Using the Net Present Value Method Indicates

question 106

Multiple Choice

A project analysis using the net present value method indicates that the present value of cash inflows is $120,000, and the total amount of investment required at the start of the project is $100,000.Which of the following statements best describes the results of the project analysis?

• A) The project should be accepted because the actual rate of return expected from the project is more than the minimum desired rate of return.
• B) The project should be accepted because the actual rate of return expected from the project is less than the minimum desired rate of return.
• C) The project should be rejected because the actual rate of return expected from the project is more than the minimum desired rate of return.
• D) The project should be rejected because the actual rate of return expected from the project is less than the minimum desired rate of return.

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