The Net Present Value of a Project Will Increase When

question 74

Multiple Choice

The net present value of a project will increase when the:

• A) Discount rate increases.
• B) Initial investment increases in amount.
• C) Cash inflows are received sooner.
• D) Estimated salvage value of the equipment is lowered.
• E) Tax rate applied to the project's profits is increased.

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Definitions:

Consumer's Budget

The total amount of income available to an individual or household for spending and saving after taxes have been accounted for.

Indifference Curves

Visual diagrams in microeconomics that display the mix of two products which provide the same level of pleasure and usefulness to a purchaser.

Indifference Map

A set of indifference curves, each representing a different level of utility, that together show the preferences of a consumer.