If the Discount Rate Is Increased from 8% to 10%,what

question 30

Multiple Choice

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

• 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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