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A negative net present value indicates that the project’s return is net loss
<h3>What is a net present values?</h3>
A net present values is a total sum of money that is currently available. It may be in terms of assets or revenue generated.
When there is a negative net present value, it means the <u>revenues generated is lower that the cost </u>of a project. This invariably leads to a loss for a particular company.
Hence a negative net present value indicates that the project’s return is net loss
Learn more on negative present values here: brainly.com/question/14960679
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Answer:
$1,200 favorable
Explanation:
Given,
Standard unit price for direct materials, SP = $8 per gallon
Actual direct materials price, AP = $22,800
Actual number of direct materials, AQ = 3,000 gallons
Actual unit price for direct materials = Actual direct materials price ÷ Actual number of direct materials
Actual unit price for direct materials = $22,800 ÷ 3,000 gallons
Actual unit price for direct materials = $7.6 per gallon
We know,
Direct Material Price Variance = (SP − AP ) × AQ
Direct Material Price Variance = $(8 - 7.6) × 3,000 gallons
Direct Material Price Variance = $1,200 favorable
