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

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Definitions:

Sociological Research

The systematic study of social behavior, interactions, and structures to understand and explain patterns of human activity.

Empirical Observation

The process of acquiring knowledge directly through the senses or via scientific instruments, which is based on experience and evidence rather than theory.

Scientific Method

A systematic and logical approach to discovering how things in the universe work, through observation, experimentation, and analysis.

Hypothesis Testing

A statistical method used to determine if there is enough evidence in a sample of data to infer that a certain condition is true for the entire population.