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

question 59

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 IRR
• B) Too high
• C) Greater than the IRR
• D) Too low
• E) Less than the IRR

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Definitions:

Spin-off Firm

A new independent company created by separating parts of an existing company, often to unlock value or focus on a specific area of expertise.

Amazon

A multinational technology company that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence.

Yum! Brands

A multinational fast-food company known for operating several well-known restaurant chains such as KFC, Pizza Hut, and Taco Bell.

Venture Capital

Funding offered by investors to emerging companies and small enterprises that show prospects for significant growth over time.