Jason,the Regional Manager for a Large Electronics Firm,is Trying to Determine

Multiple Choice

Jason,the regional manager for a large electronics firm,is trying to determine whether a new warehouse is a good investment.After working with his firm's financial managers,he concludes that the project carries a negative net present value.What should Jason do-and why?

A) Not invest in the warehouse-a negative NPV means the firm doesn't have enough money to afford the investment.
B) Invest in the warehouse-a negative NPV means that the cost of financing the warehouse is less than the cost of any other investment.
C) Not invest in the warehouse-a negative NPV means that the present value of the positive cash flows are not high enough to justify the costs of the warehouse.
D) Invest in the warehouse-a negative NPV indicates that failing to do so will reduce the value of the firm to its shareholders.