A firm is evaluating a project that has a net present value of $0 when a discount rate of 8 percent is used. A discount rate of 6 percent will result in a

Question

Quizplus · Accepted Answer

A lower discount rate will increase the present value of future cash flows, which will likely result in a positive net present value for the project. Therefore, if the project has an NPV of $0 at a discount rate of 8%, it is likely that the NPV will be positive at a discount rate of 6%.

A Firm Is Evaluating a Project That Has a Net