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.

---

Definitions:

Traumatic Amnesia

A condition where a person is unable to remember important aspects of a traumatic event, often as a protective psychological response.

PMS

Pre-Menstrual Syndrome, a condition that affects a woman's emotions, physical health, and behavior during certain days of the menstrual cycle, generally just before her menses.

Hypnotized

The state of being under hypnosis, characterized by increased suggestibility, relaxation, and focused attention.

Hypnosis

A trance-like state of heightened susceptibility to suggestion, used for therapeutic purposes or in research.