If I have four alternatives and all of them has a negative NPV, should I still recommend one of them to my customer? I'm also using a weighted scoring system to make a decision, but I just don't think that I can recommend anything to the customer if they are going to lose money on the investment. Saving Changes...
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Mark Price PerryBusiness Driven PMO Evangelist| BOT InternationalOrlando, Fl, United States
Typically, you would not go forward with an investment that offers a negative net present value. But, there can be exceptions, many. And, you can have projects with no projected benefits, only costs - office remodeling, market research, competitive analysis, training, compliance, safety, etc.
Need more info. Saving Changes...
Aditya ChinniSr Project Manager| JELDWENKlamath Falls, Or, United States
I agree with Mark. there can be many exceptions. There are many other reasons to undertake a project.
NPV is always depend on the IRR that you use. Many companies reject projects based on high IRR requirements, and also cost of their money. (Outstanding loans and interests).
Lower the rate in your calculations, NPV can be different.
Probably you have to adopt BCR, or other mathematical models to pick a project. Negative NPV doesn't always mean your customer loose money. It also can mean that your customer might not get desired profits. His cost to benefits might be positive. As I said the "rate" in your calculations is resulting the negative NPV values.
