Which of the Following Will Have the Largest Dollar Effect

question 63

Multiple Choice

Which of the following will have the largest dollar effect on the net present value of a 10 year investment project?

• A)a decrease of $20,000 in the initial investment required with no effect on the expected salvage value in 10 years.
• B)an increase of $20,000 in the expected salvage value in 10 years with no effect on the initial investment.
• C)a decrease of $20,000 in both the working capital needed to start the project and the amount being released at the end of the 10 years.
• D)an increase of $2,000 in the annual cash inflows from this project.