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.

Understand the relationship between federal budget deficits/surpluses and the national debt.

Comprehend the impact of taxes and government spending on real GDP.

Understand the principles of fiscal policy and its use in stabilizing the economy.

Recognize the role and impact of automatic stabilizers in the economy.

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Definitions:

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The natural cycle of sleep and wakefulness in a 24-hour period, regulated by the body's internal clock.

Circadian Rhythm

The inherent biological mechanism that controls the cycle of sleeping and waking, recurring approximately every 24 hours.

Phi Phenomenon

An optical illusion where stationary objects shown in rapid succession, such as flashing lights, appear to be in motion.

Manifest Content

In psychoanalytic theory, the actual literal content and storyline of a dream as remembered by the individual.