Assuming That the Total Cash Flows Are Equal, the NPV

question 32

True/False

Assuming that the total cash flows are equal, the NPV of a project whose cash flows accrue relatively rapidly is more sensitive to changes in the discount rate than is the NPV of a project whose cash flows come in more slowly.

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Definitions:

Relativism

The belief that the understanding of knowledge, truth, and ethics is relative to a person's culture, societal background, or historical circumstances, rather than being universal or unchanging.

Preestablished Harmony

A philosophical doctrine proposed by Leibniz suggesting that every substance is in perfect coordination with all others by virtue of God's preordained harmonious plan.

Mental Events

Phenomena that occur within the mind or consciousness, including thoughts, feelings, beliefs, and intentions.

Physical Events

Occurrences or phenomena that involve changes in the state or motion of physical objects.