Jessie, the Regional Manager of a Large Electronics Firm, Is

Multiple Choice

Jessie, the regional manager of a large electronics firm, is trying to determine whether a new warehouse for her firm would be a good investment. After discussing with her firm's financial managers, she concludes that the project carries a negative NPV (Net Present Value) . What should Jessie do and why?

A) She should invest in the warehouse to increase profits since a negative NPV indicates that the firm needs to generate more funds to stay afloat.
B) She should not invest in the warehouse since a negative NPV means that the present value of the future cash flows does not justify the cost of the warehouse.
C) She should invest in the warehouse since a negative NPV means that the cost of financing the warehouse is within the company's budget for expenses.
D) She should not invest in the warehouse since a negative NPV means that the firm cannot afford the investment.