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which describes the general relationship among NPV, project risk, and expected return—which of the following is...

which describes the general relationship among NPV, project risk, and expected return—which of the following is true if the project has an NPV < 0? 1. The project's expected return is greater than its required expected return. 2. The project's expected return is less than its required expected return. 3. The project's expected return is equal to its required expected return.

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Answer #1

The project's expected return is less than its required expected return.

NPV is calculated by subtracting present value of cash outflows from present value of cash inflows. A project have more cash outflows than cash inflows will have expected return less than required return.

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