If a Business Was Considering an Investment of $350,000 and the Net

question 3

Multiple Choice

If a business was considering an investment of $350,000 and the Net Present Value (NPV) of its expected cash flow at 12% was ($25,000) this would mean that the business should

• A) Take on the project and expect $25000 less profit than projected
• B) Not take on the project as the company will lose its investment of $375,000
• C) Take on the project only if it can invest $25,000 less
• D) Take on the project as it is worth the equivalent of $25,000 today
• E) Not take on the project as returns do not adequately compensate investors

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