An Investment Project for Which the Net Present Value Is

question 12

Multiple Choice

An investment project for which the net present value is $300 would result in which of the following conclusions?

• A)The net present value is too small;the project should be rejected.
• B)The rate of return of the investment project is greater than the required rate of return.
• C)The net present value method is not suitable for evaluating this project;the internal rate of return method should be used.
• D)The investment project should only be accepted if net present value is zero;a positive net present value indicates an error in the estimates associated with the analysis of this investment.