A larger interest rate will reduce all of the following, except the:

Name: A larger interest rate will reduce all of the following, except the:
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Question

Quizplus · Accepted Answer

A larger interest rate will increase the discount rate used in calculating present value, which will decrease the present value of future cash flows and therefore the profitability index and net present value. However, it will not affect the initial cash flow, which is a fixed value at the beginning of the project.

A Larger Interest Rate Will Reduce All of the Following