Q465
In capital budgeting, a negative net present value results in
A.
zero economic value added
B.
percent economic value added
C.
negative economic value added
AnswerD.
positive economic value added
Answer: Option C
Solution
Answer: Option C
Solution:
Economic value added is the incremental difference in the rate of return over a company's cost of capital. In essence, it is the value generated from funds invested in a business. If the economic value added measurement turns out to be negative, this means that management is destroying the value of the funds invested in a business