If a Capital Budgeting Project Has a Negative Net Present

question 25

Multiple Choice

If a capital budgeting project has a negative net present value (NPV) ,

• A)its internal rate of return (IRR) is also negative.
• B)its discounted payback period (DPB) is greater than the project's economic life.
• C)the firm should invest in the project as long as the initial investment outlay is low.
• D)its traditional payback period (PB) is greater than the firm's expected payback period.
• E)its internal rate of return (IRR) is greater than the discount rate that would be used to compute the project's NPV.

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Definitions:

Bridge Employment

A form of employment taken by individuals transitioning from their primary career into retirement.

Permanent Withdrawal

The act of leaving a position, role, or organization with no intention of returning, typically referring to retirement or resignation.

Full-time Work

Employment in which an individual works a minimum number of hours defined as such by their employer, typically involving a commitment of 35-40 hours per week.

Phased Retirement

An arrangement that allows employees to reduce their hours and/or responsibilities in order to ease into retirement.