What Will Happen to the Net Present Value (NPV)of a Project

question 116

Multiple Choice

What will happen to the net present value (NPV) of a project if the discount rate is increased from 8% to 10%?

• A)NPV will always decrease.
• B)NPV will always increase.
• C)The discount rate change will not affect NPV.
• D)We cannot determine the direction of the effect on NPV from the information provided.

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Definitions:

Flexibility and Creativity

Flexibility and creativity are qualities that allow individuals or organizations to adapt to change and generate innovative solutions to problems.

Hierarchical Division

The breaking down of an organizational structure into levels of hierarchy, where tasks and responsibilities are clearly delineated by rank.

Formal Authority

Formal authority is the official power granted to an individual or entity within an organization to make decisions, direct others, and enforce obedience based on their position or role.

Vertical Specialization

The structuring of an organization’s workforce based on hierarchical levels of authority and specialized functions or tasks.