Consider a project with an initial outflow at time 0 and positive cash flows in all subsequent years As the discount rate increases, the A IRR remains constant while the NPV increases B IRR decreases while the NPV remains constant C IRR increases while the NPV remains constant D IRR remains constant while the NPV decreases E IRR decreases while the NPV decreases

The Answer is in the image, click to view ...

Question: Consider a project with an initial outflow at time 0 and positive cash flows in all subsequent years. As the discount rate increases, the _____________.

Consider a project with an initial outflow at time 0 and positive cash flows in all subsequent years. As the discount rate increases, the _____________.

		A. IRR remains constant while the NPV increases.
		B. IRR decreases while the NPV remains constant.
		C. IRR increases while the NPV remains constant.
		D. IRR remains constant while the NPV decreases.
		E. IRR decreases while the NPV decreases.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

kindly provide the correct options with supporting statements 10. If the NPV is applied as the official investment appraisal method: a. b. All mutually exclusive projects with positive NPVS should be...

Consider a project with an initial outflow at time 0 and positive cash flows in all subsequent years. As the discount rate is increased the a . IRR remains constant while the NPV increases. b . IRR...

-If the Cost of Goods decreases and all other factors remain the same then: NPV will remain the same Not enough information NPV will increase (Explain why this is the correct answer) NPV will...

Consider a project with an initial outflow at time 0 and positive cash flows in all subsequent years. As the discount rate decreases the IRR increases while the NPV remains constant. . IRR decreases...

As the requirec rate of return increases, the: (Assuming a normal cash flow with an initial outflow at time 0 and positive cash flows in all subsequent years.) Select one: O a. Profitability index...

As the required rate of return increases, the : (Assuming a normal cash flow with an initial outflow at time 0 and positive cash flows in all subsequent years.) A) None of the given choices are...

As the required rate of return increases, the: (Assuming a normal cash flow with an initial outflow at time 0 and positive cash flows in all subsequent years.) Select one: O a. Profitability index...

As the required rate of return increases the: (Assuming a normal cash flow with an initial outflow at time 0 and positive cash flows in all subsequent years.) Select one: O a. Payback period...

Consider a project with an initial investment and positive future cash flows. As the cost of capital decreases the: IRR remains constant while the NPV decreases IRR decreases while the NPV decreases...

Could the tutors help me to do this homework please? It's cost accounting class. 1. Square Manufacturing is considering investing in a robotics manufacturing line. Installation of the line will cost...

Cheeseburger and Taco Company purchases 10,215 boxes of cheese each year. It costs $11 to place and ship each order and $9.34 per year for each box held as inventory. The company is using Economic...

Why would a business like Coca-Cola opt to use the GE/McKinsey portfolio model over other portfolio models?

Explain the relationship between current and future dollars.

Draw a class diagram and its relationship based on the following statements. You can use any UML tool/software to represent your class diagram. Do NOT copy and paste your diagram, use the attachment...