When Calculating the NPV,what Discount Rate Should We Use

question 10

Multiple Choice

When calculating the NPV,what discount rate should we use?

• A)A discount rate equal to the investment return that could be earned on nonmarketable securities with similar risk characteristics.
• B)A discount rate equal to the investment return that could be earned on marketable securities with similar risk characteristics.
• C)A discount rate equal to the investment return that could be earned on low-risk marketable securities.
• D)A discount rate equal to the investment return that could be earned on high-risk nonmarketable securities.
• E)None of the above.

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