Project Management Professional Practice Question

The correct answer is to recommend proceeding with the project after a holistic review. While a negative NPV typically indicates a project will not be profitable, it is not the only factor in project selection. Mandatory projects, such as those required for regulatory compliance, safety, or legal reasons, must often be undertaken regardless of their financial return. The project manager's duty is to present all relevant information, including the financial analysis and the strategic necessity, to stakeholders to enable an informed decision. Simply rejecting the project based on NPV alone would be a failure to consider the full business context. Starting the project without documenting the financial implications is irresponsible, and attempting to manipulate the NPV is unethical.