The Net Present Value of a Project Will Increase When

question 344

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:

Logarithm

The exponent to which a base must be raised to produce a given number, expressing the relationship between a geometric progression and an arithmetic progression.

Calculator

An electronic device or software used for performing mathematical operations.

Inverse Function

A function that reverses the effect of the original function, such that applying both the function and its inverse will return the original input.

Graph

A drawing that portrays the network of relations or connections between various items through the use of distinct features like dots, lines, and bars.