Assuming That Their NPVs Based on the Firm's Cost of Capital

question 42

True/False

Assuming that their NPVs based on the firm's cost of capital are equal, the NPV of a project whose cash flows accrue relatively rapidly will be more sensitive to changes in the discount rate than the NPV of a project whose cash flows come in later in its life.

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Definitions:

Physiologist

A scientist who studies the normal functions and mechanisms of living organisms and their parts.

Classical Conditioning

A teaching technique that pairs two stimuli together repeatedly, so that a response initially elicited by the second stimulus is later elicited by the first stimulus alone.

Dog Trainer

A professional who applies behavior analysis to teach, train, or assist dogs to obey commands or undertake specific tasks.

Unconditioned Stimulus

A stimulus that naturally and automatically triggers a response without prior conditioning.