If the market interest rate rises from 8% to 10%, the net present discounted value of a ten-year investment project will

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As the market interest rate increases from 8% to 10%, the discount rate used to calculate the net present value of an investment project also increases. A higher discount rate results in a lower net present value. Since the ten-year investment project has a longer duration than the two-year project, its cash flows will be discounted at a higher rate for a longer period of time, resulting in a greater reduction in its net present value compared to the two-year project. Therefore, the net present discounted value of a ten-year investment project will fall more than a two-year project.

If the Market Interest Rate Rises from 8% to 10