Joan Osborne is evaluating a potential capital investment. She has calculated the net present value using a minimum rate of return of 10%. Using this rate, the net present value is negative. What does this tell her about the rate of return expected for the project?

If the net present value is negative; the expected rate of return for the project is less than the 10% minimum or required rate of return.

None of the other answers is correct.

If the net present value is negative; the expected rate of return for the project is greater than the 10% minimum or required rate of return.

If the net present value is negative; the expected rate of return for the project is equal to the 10% minimum or required rate of return.