If the Net Present Value of an Investment Is Negative

question 49

Multiple Choice

If the net present value of an investment is negative, then:

• A) the present value of the cash inflows is greater than the present value of the cash outflows.
• B) the discount rate is negative.
• C) the actual rate of return is less than the discount rate used.
• D) increasing the cost of the investment will change the net present value to a positive number.

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