If Interest Rates Are ____, ____ Projects Will Have Positive

question 7

Multiple Choice

If interest rates are ____, ____ projects will have positive NPVs.

• A) higher; more
• B) lower; more
• C) lower; no
• D) none of the above

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Definitions:

Discount Rate

In discounted cash flow analysis, it's the rate employed to calculate the present value of anticipated cash flows.

Net Present Value

The discrepancy between the current value of incoming cash and the current value of outgoing cash throughout a given timeframe.

Cash Savings

The amount of money a company or individual keeps on hand that is not invested, spent, or used in paying off debts.

Salvage Value

The estimated value for which an asset can be sold at the end of its useful life, typically used for depreciation calculations.