If a company uses a 12% discount rate with the net present value method, and then does the same analysis, but with a 15% discount rate, which of the following is likely to occur?
A) The 12% rate will show the project is more profitable than the 15% rate.
B) The 15% rate will show the project is more profitable than the 12% rate.
C) Both rates will produce the same net present value.
D) The relative profitability of the two studies depends only on the timing of the cash flows, not on the discount rate.
Correct Answer:
Verified
Q26: Using the internal rate of return method,
Q46: The following information is available for a
Q66: A post-audit should be performed using
A)a different
Q74: Post-audits of capital projects
A)are usually foolproof.
B)are done
Q83: Intangible benefits in capital budgeting
A) should be
Q84: In evaluating high-tech projects,
A) only tangible benefits
Q86: Intangible benefits in capital budgeting would include
Q92: An approach that uses a number of
Q93: The capital budgeting method that allows comparison
Q96: The capital budgeting method that takes into
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents