Other Things Held Constant, Which of the Following Would Increase

question 35

Multiple Choice

Other things held constant, which of the following would increase the NPV of a project being considered?

• A) A shift from MACRS to straight-line depreciation.
• B) Making the initial investment in the first year rather than spreading it over the first 3 years.
• C) A decrease in the discount rate associated with the project.
• D) The sale of the old machine in a replacement decision at a capital loss rather than at book value.
• E) An increase in required working capital.

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Definitions:

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A document that follows established conventions or requirements, often used in professional or legal contexts.

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A contract that adheres to a specific form or is ceremonial in nature, often requiring written documentation and signatures.

Simple Contract

A written or verbal contract not under seal; also called a parol contract.

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The state of being legally responsible for something, such as a debt or obligation.