A project has the following cash flows: C₀ = −100,000; C₁ = 50,000; C₂ = 150,000; C₃ = 100,000. If the discount rate changes from 12 percent to 15 percent, what is the CHANGE in the NPV of the project (approximately)? A)12,750 increase B)12,750 decrease C)14,240 increase D)14,240 decrease

Question

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The NPV decreases when the discount rate increases. Calculating NPV at 12% and 15% and finding the difference gives an approximate decrease of 12,750.

A Project Has the Following Cash Flows: C0 = −100,000;

A Project Has the Following Cash Flows: C₀ = −100,000;