If the Discount Rate Is Increased from 8% to 10

question 146

Multiple Choice

If the discount rate is increased from 8% to 10%, what will happen to the net present value (NPV) of a project (assume all future cash flows are positive) ?

• A) NPV will always increase.
• B) NPV will always decrease.
• 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:

Liden's Model

A conceptual framework for understanding leadership, focusing on leader-member exchange and its impact on organizational behavior.

Leader Behaviors

Actions, strategies, and practices exhibited by leaders to influence, direct, and manage a team or organization.

Liden's Model

A perspective on leadership that emphasizes the importance of social exchange between leaders and followers, enhancing mutual trust and respect.

Servant Leadership

A leadership philosophy that emphasizes the leader's role as a caretaker who prioritizes the welfare of their team members and addresses their needs.