Why are projects with negative net present values (NPVs) unacceptable to a firm?

Question

TuteeHUB · Accepted Answer

Returns with negative NPVs cause an equal profit ratio.

TuteeHUB · Answer

Returns lower than the cost of capital result in firm failure.

TuteeHUB · Answer

Returns with negative NPVs are acceptable to a firm

TuteeHUB · Answer

Returns lower than the cost of capital result in higher profit ratios

1.	Why are projects with negative net present values (NPVs) unacceptable to a firm?
A.	Returns lower than the cost of capital result in firm failure.
B.	Returns with negative NPVs cause an equal profit ratio.
C.	Returns with negative NPVs are acceptable to a firm
D.	Returns lower than the cost of capital result in higher profit ratios
Answer» B. Returns with negative NPVs cause an equal profit ratio.

Discussion