Assuming That the Total Cash Flows Are Equal, the NPV

question 32

True/False

Assuming that the total cash flows are equal, the NPV of a project whose cash flows accrue relatively rapidly is more sensitive to changes in the discount rate than is the NPV of a project whose cash flows come in more slowly.

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Definitions:

Mark-up

A supplementary percentage of the cost price of products designed to account for overhead costs and profit margins.

Profit or Loss

The financial outcome of a business or investment, determined by subtracting expenses from revenue, indicating either earnings (profit) or shortfall (loss).

Outstanding Balance

The amount of money owed that remains in a borrower's account that has not yet been paid.

Invoice

A document issued by a seller to a buyer, listing goods or services provided, with their prices, and requesting payment.