If a Project Has a Negative Net Present Value, the Internal

question 127

Multiple Choice

If a project has a negative net present value, the internal rate of return will be

• A) less than the discount rate.
• B) greater than the discount rate.
• C) equal to the discount rate.
• D) a negative rate of return.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Cash Paid

The total amount of currency that an entity disburses in exchange for goods or services or to settle debts.

Suppliers

Entities or individuals that provide goods or services to another entity, typically in a commercial transaction.

Income Tax Expense

The amount of money a company owes in taxes based on its taxable income for a given period.