An investment project for which the net present value is $300 would result in wh

Question

An investment project for which the net present value is $300 would result in which of the following conclusions? Answer A. The net present value is too small; the project should be rejected. B. The rate of return of the investment project is greater than the required rate of return. C. The net present value method is not suitable for evaluating this project; the internal rate of return method should be used. D. The investment project should only be accepted if net present value is zero; a positive net present value indicates an error in the estimates associated with the analysis of this investment.

Explanation / Answer

B. The rate of return of the investment project is greater than the required rate of return.

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