Investing in a negative NPV project today is a feasible choice if:
A)there are future option alternatives.
B)investing is sequentially limited.
C)the discount rate is low.
D)Both A and B.
E)Both A and C.

Question

Quizplus · Accepted Answer

Investing in a negative NPV project today may be feasible if there are future option alternatives that can increase the project's value or if investing is sequentially limited and this project is the best option available at the moment. Therefore, option A and B are correct. Additionally, a low discount rate may also make investing in a negative NPV project feasible. Hence, option C is incorrect. Therefore, the best choice is D, which includes both A and B.

Investing in a Negative NPV Project Today Is a Feasible