A Project with a Negative Net Present Value Should Be

question 150

Multiple Choice

A project with a negative net present value should be:

• A) rejected as it does not take the time value of money into account.
• B) rejected since the expected future cash flows from the project are less than the cost of the investment.
• C) accepted since the net present value does not alter the company's capital budgeting.
• D) accepted since the expected future cash flows from the project exceed the cost of the investment.

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Definitions:

Sarbanes-Oxley Act

A United States federal law enacted in 2002 that sets new or enhanced standards for all U.S. public company boards, management, and public accounting firms, aiming to protect investors from fraudulent financial reporting.

Audit

A systematic examination and evaluation of data or documents by a qualified professional to check their accuracy and compliance with established standards or regulations.

Review Working Papers

The process of examining the documents and records that auditors create during an audit to ensure accuracy and completeness.

Administrative Proceeding

A legal process conducted by a government agency to enforce its legal authority over certain matters.