The net present value of a project tells management what decision to make on that investment. If the net present value is negat management should: accept the project because the cost is less than the revenue, thereby adding value to the firm. O reject the project because the present value of future cash-flows is greater than the cost of the project. O reject the project because accepting would reduce the value of the firm. O accept or reject depending on the project's payback period.
The net present value of a project tells management what decision to make on that investment. If the net present value is negat management should: accept the project because the cost is less than the revenue, thereby adding value to the firm. O reject the project because the present value of future cash-flows is greater than the cost of the project. O reject the project because accepting would reduce the value of the firm. O accept or reject depending on the project's payback period.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter12: Capital Investment Decisions
Section: Chapter Questions
Problem 16MCQ: Using IRR, a project is rejected if the IRR a. is equal to the required rate of return. b. is less...
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