Which of the Following Changes Will Increase the NPV of a Project

question 110

Multiple Choice

Which of the following changes will increase the NPV of a project?

• A) A decrease in the discount rate
• B) A decrease in the size of the cash inflows
• C) An increase in the initial cost of the project
• D) A decrease in the number of cash inflows

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or within the business's normal operating cycle.

Retained Earnings

The part of the net earnings not paid out as dividends to shareholders but instead retained by the business for reinvestment purposes or debt repayment.

Cumulative Earnings

The total amount of net income a company has earned over its existence, after dividends and other distributions are subtracted.

Accounting Equation

A fundamental principle representing the relationship among assets, liabilities, and owner's equity (Assets = Liabilities + Owner's Equity).