What effect does an increased discount rate have on project evaluations?
A)Increases net cash flow
B)Decreases net cash flow
C)Increases the probability that a project will be accepted
D)It has no effect on project evaluation

Question

Quizplus · Accepted Answer

Increasing the discount rate decreases the present value of future cash flows, which effectively decreases net cash flow in project evaluations.

What Effect Does an Increased Discount Rate Have on Project