If a division manager in a large organization reports to you that the NPV of...
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Accounting
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If a division manager in a large organization reports to you that the NPV of a proposed project is positive, what should you do?
A. All of the listed responses.
B. None of the listed responses.
C. Accept the project since firm value is maximized by accepting all positive NPV projects.
D. Try to understand the underlying economics of why the NPV could be positive for your firm.
E. Re-evaluate the project using an higher discount rate since the manager is probably too optimistic.
If a division manager in a large organization reports to you that the NPV of a proposed project is positive, what should you do?
| A. | All of the listed responses. | |
| B. | None of the listed responses. | |
| C. | Accept the project since firm value is maximized by accepting all positive NPV projects. | |
| D. | Try to understand the underlying economics of why the NPV could be positive for your firm. | |
| E. | Re-evaluate the project using an higher discount rate since the manager is probably too optimistic. |
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