After Arriving at a Positive Net Present Value,you Recently Presented

question 13

Multiple Choice

After arriving at a positive net present value,you recently presented an investment proposal to the CFO of your company.The CFO remarks that income tax rates are expected to decrease in the next few years.How will a decrease in estimated tax rates affect the net present value?

• A)increase
• B)decrease
• C)no effect
• D)unable to determine from the information given

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Definitions:

Prices

The amount of money required to purchase a good or service.

Arbitrage

The simultaneous purchase and sale of the same asset in different markets to profit from tiny differences in the asset's listed price.

Shrimp

A small, decapod crustacean found in marine and freshwater environments, often consumed as seafood.

Manhattan

A densely populated borough of New York City, known for its significant cultural, financial, and commercial landmarks.