What Effect Does an Increased Discount Rate Have on Project

question 53

Multiple Choice

What effect does an increased discount rate have on project evaluations?

• A)Increases net cash flow
• B)Decreases net cash flow
• C)Increases the probability that a project will be accepted
• D)It has no effect on project evaluation

---

Definitions:

Flood Basalts

Large-scale volcanic events characterized by the rapid flow of basalt lava that covers vast areas of the Earth's surface.

Rapid Subduction

A geologic process involving the quick descent of one tectonic plate beneath another plate into the mantle, often leading to significant geological events like earthquakes and volcanism.

Shield Volcanoes

These are characterized by their extensive size and gentle slopes, produced by the effusion of low-viscosity lava that can travel far from the source.

Basalt Lava

Molten rock that emerges from the earth during a volcanic eruption, characterized by its high iron and magnesium content, and low viscosity.