A project with a current negative net present value Multiple

A project with a current negative net present value

Multiple Choice

a. should still be accepted if its projected sales quantity is less than the financial breakeven point.

b. might have a positive net present value at a later date in time.

c. will always have a higher (less negative) net present value at a later time.

d. should still be accepted if it can breakeven on an accounting profit basis.

Solution

Option B is correct , which says, A project with current negative NPV might have a positive net present value at a later date in time.As the Present value depends on required rate and expected cash flow and both of them could get change over time and can give Positive NPV