which project is better if npvs of both projects comes negative
Answers
Answer:
Sometimes projects seem to have a negative NPV because the investment doesn’t make anything better; rather, it keeps from making something worse. If a roof isn’t replaced, it will leak and eventually the company will need to close the facility. Or worse, the roof collapses, resulting in litigation. Keeping that bad outcome from happening is beneficial, but including the facility running or not isn’t helpful to the NPV analysis. So we live with a negative NPV – but should still try to find the least negative NPV solution ! unless u wanna destroy that project :)
Answer:
hope it helps
Step-by-step explanation:
When NPV is positive, the investment is worthwhile; On the other hand, when it is negative, it should not be undertaken; and when it is 0, there is no difference in the present values of the cash outflows and inflows.