Question

All else constant, the net present value of a typical investment project decreases when

a. the discount rate increases

b. each cash inflow is delayed by one year

c. the initial cost of a project increases

d. all cash inflows occur during the last year instead of periodically throughout a project's life.

e. more than one of the above is true.

Answer 1

The correct answer will be option e i.e. more than one of the above is true.

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