Holding other factors constant, an international project's NPV is ____ related to consumer demand and ____ related to the project's salvage value.

Question

Holding other factors constant, an international project's NPV is ____ related to consumer demand and ____ related to the project's salvage value.​

Quizplus · Accepted Answer

Consumer demand is a key driver of a project's revenue, and a higher demand leads to higher cash flows and thus a higher NPV. Similarly, the salvage value of a project is an important factor in determining the project's overall cash flows, and a higher salvage value leads to higher NPV. Therefore, the relationship is positive in both cases.

Holding Other Factors Constant, an International Project's NPV Is ____