Question: You have just evaluated a long-term economic project for your city that will require millions of dollars of up front costs and have determined that

You have just evaluated a long-term economic project for your city that will require millions of dollars of up front costs and have determined that at the discount rate you used to evaluate this project (8%) it will have a barely positive Net Present Value (NPV). Additional investigation and analysis of this project indicates that it is more risky than you first thought. Now you believe that a 12% discount rate is more appropriate for evaluating this project. If you perform a new analysis at a 12% discount rate what result would you expect to find?

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