{"id":51390,"date":"2024-04-15T23:24:08","date_gmt":"2024-04-15T23:24:08","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=51390"},"modified":"2024-04-15T23:24:08","modified_gmt":"2024-04-15T23:24:08","slug":"when-is-the-net-present-value-negative","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/when-is-the-net-present-value-negative\/","title":{"rendered":"When is the net present value negative,"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;the present value of cash outflows is greater than the future value of cash outflows&#8221; option2=&#8221;the future value of cash inflows is greater than the present value of cash outflows&#8221; option3=&#8221;the present value of cash outflows is greater than the present value of cash inflows&#8221; option4=&#8221;the present value of cash inflows is greater than the present value of cash outflows&#8221; correct=&#8221;option3&#8243;]<!--more--><\/p>\n<p>The correct answer is: C. the present value of cash outflows is greater than the present value of cash inflows.<\/p>\n<p>The net present value (NPV) is a method of calculating the present value of a future stream of cash flows. It is calculated by taking the sum of the present values of all future cash flows and subtracting the initial investment.<\/p>\n<p>A negative NPV indicates that the present value of the future cash flows is less than the initial investment. This means that the project is not expected to generate a profit.<\/p>\n<p>Option A is incorrect because the future value of cash outflows is not relevant to the calculation of NPV. The only relevant values are the present values of the cash flows.<\/p>\n<p>Option B is incorrect because the present value of cash inflows is not relevant to the calculation of NPV. The only relevant values are the present values of the cash flows.<\/p>\n<p>Option D is incorrect because the present value of cash inflows is greater than the present value of cash outflows. This would result in a positive NPV, which indicates that the project is expected to generate a profit.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;the present value of cash outflows is greater than the future value of cash outflows&#8221; option2=&#8221;the future value of cash inflows is greater than the present value of cash outflows&#8221; option3=&#8221;the present value of cash outflows is greater than the present value of cash inflows&#8221; option4=&#8221;the present value of cash inflows is greater than &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"When is the net present value negative,\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/when-is-the-net-present-value-negative\/#more-51390\">Detailed Solution<span class=\"screen-reader-text\">When is the net present value negative,<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-51390","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>When is the net present value negative,<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/when-is-the-net-present-value-negative\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"When is the net present value negative,\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;the present value of cash outflows is greater than the future value of cash outflows&#8221; option2=&#8221;the future value of cash inflows is greater than the present value of cash outflows&#8221; option3=&#8221;the present value of cash outflows is greater than the present value of cash inflows&#8221; option4=&#8221;the present value of cash inflows is greater than ... Detailed SolutionWhen is the net present value negative,\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/when-is-the-net-present-value-negative\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T23:24:08+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"When is the net present value negative,","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/when-is-the-net-present-value-negative\/","og_locale":"en_US","og_type":"article","og_title":"When is the net present value negative,","og_description":"[amp_mcq option1=&#8221;the present value of cash outflows is greater than the future value of cash outflows&#8221; option2=&#8221;the future value of cash inflows is greater than the present value of cash outflows&#8221; option3=&#8221;the present value of cash outflows is greater than the present value of cash inflows&#8221; option4=&#8221;the present value of cash inflows is greater than ... 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