Economics · Financial Management

What does it represent if the Net Present Value (NPV) of a project is less than zero (NPV < 0)?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1The project is in a highly profitable stage
2The present value of cash inflows exceeds the initial investment
3The present value of cash inflows is less than the initial investment✓
4The project has zero cost of capital

Correct answer

The present value of cash inflows is less than the initial investment

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What does it represent if the Net Present Value (NPV) of a project is less than zero (NPV < 0)?

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What does it represent if the Net Present Value (NPV) of a project is less than zero (NPV < 0)?

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