If the Calculated NPV Is Negative,then Which of the Following

question 181

Multiple Choice

If the calculated NPV is negative,then which of the following must be true? The discount rate used is

• A) Equal to the internal rate of return.
• B) Too high.
• C) Greater than the internal rate of return.
• D) Too low.
• E) Less than the internal rate of return.

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Definitions:

Unadjusted Trial Balance

A preliminary list of all accounts and their balances used in accounting, before any adjustments are made for the closing entries.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency.

Current Liabilities

Short-term financial obligations that are due to be paid within one year or within the business's operating cycle.

Current Assets

Short-term resources that are expected to be converted into cash or used up within one year or within the operating cycle, whichever is longer.