What Happens to the NPV of a One-Year Project If

question 45

Multiple Choice

What happens to the NPV of a one-year project if fixed costs are increased from $400 to $600, the firm is profitable, has a 15 percent tax rate and employs a 12 percent cost of capital?

• A)NPV decreases by $200.00
• B)NPV decreases by $173.91
• C)NPV decreases by $130.00
• D)NPV decreases by $151.79

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Definitions:

Truth Values

The valuation in logic referring to the states of truth (typically true or false) that a logical statement can hold.

Truth Table

A logic table that helps in figuring out the results of logical expressions according to their given arguments.

Truth Values

The truth or falsity of a statement, traditionally designated as 'true' or 'false'.

Truth Table

A mathematical table used in logic to determine the truth value of a compound statement based on the truth values of its components under all possible interpretations.