The net present value will be larger if

Question

Quizplus · Accepted Answer

A lower cost of investment means that the initial outflow is smaller, which increases the net present value. A higher cost of capital would decrease the present value of future cash flows, lowering the net present value. The presence of a salvage value would also increase the net present value, but it is not the best choice among the given options. Straight-line depreciation does not affect net present value as it is just a method of allocating costs over time.

The Net Present Value Will Be Larger If