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If the calculated NPV is negative, then which of the following must be true? The discount rate used is: Greater than the IRR Too low
If the calculated NPV is negative, then which of the following must be true? The discount rate used is: Greater than the IRR Too low Too high Equal to the IRR Less than the IRR D Question 16 5 pts What is the profitability index of a project that has a current cost of $100,000 and expected cash flows of $50,000 at the end of each of the next 7 years if the cost of capital is 20%? Round to two decimal places. Analysts at Tabby Fur Storage predict that the net present value of a proposed new $10 million warehouse is $1 million. How should these findings be interpreted? The project does not meet the acceptance criteria of the NPV method and should be rejected. The project should be rejected because the NPV is less than the cost of the warehouse Although NPV is positive, its value is too low for such a large expenditure and as a result, the project should be rejected More information such as the payback period should be evaluated since the reliance on only one capital budgeting technique should be discouraged The project should be cerpted because it will add value to the form
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