A Capital Investment Project Will Have a Higher Net Present

question 28

Multiple Choice

A capital investment project will have a higher net present value, everything else being equal, if it has:

• A) A higher initial investment level.
• B) A higher discount rate.
• C) Cash inflows that are larger in the later years of the life of the project.
• D) Cash inflows that are larger in the earlier years of the life of the project.

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Definitions:

Raise Capital

The process by which a company or individual secures money from investors or lenders for business activities or expansion.

TSX

The Toronto Stock Exchange, which is the largest stock exchange in Canada, trading Canadian securities.

Dealer Market

A financial market mechanism in which buyers and sellers execute transactions through dealers who buy and sell for their own accounts.