A Project Has a Projected IRR of Negative 100 Percent

question 77

Multiple Choice

A project has a projected IRR of negative 100 percent.Which one of the following statements must also be true concerning this project?

• A)The discounted payback period equals the life of the project.
• B)The operating cash flow is positive and equal to the depreciation.
• C)The net present value of the project is negative and equal to the initial investment.
• D)The payback period is exactly equal to the life of the project.
• E)The net present value of the project is equal to zero.

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Definitions:

Invested

The act of allocating resources, often money, into something to earn a financial return or achieve another economic benefit.

Annually

Refers to an occurrence or calculation done once every year.

Stamp Collection

A hobby involving the collection and study of postage stamps, often regarded as a form of historical and artistic interest.

Valued

Considered to hold importance, worth, or usefulness in a particular context.