Suppose you are evaluating a project using the net present value (NPV) method. You note that when you use the project cost of capital, the project NPV is negative. When you use the company cost of capital, the project NPV is positive. Which of the following is the correct decision?

answer choices

1. verify the results using the internal rate of return

2. either decision, accept or reject, would be correct

3. use the project cost of capital and reject the project

4. average the two costs of capital and reevaluate the project

use the company cost of capital and accept the project