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Negative NPV project

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In a capital budgeting decision if a firm uses the net present value method and a 12% discount rate what does a negative net present value indicate:

a. the proposals rate of return exceeds 12%
b. the proposals rate of return is less then the minimum rate required
c. the proposal earns a rate of return between 10-12%
d. none of the above

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This solution provides the correct answer with explanation to the negative net present value multiple choice question listed.

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b. the proposals rate of return is less then the minimum rate required

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