An increase in the risk-adjusted discount rate causes the net present value of a project to increase, all else held constant.

Name: An increase in the risk-adjusted discount rate causes the net present value of a project to increase, all else held constant.
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Question

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An increase in the risk-adjusted discount rate decreases the net present value (NPV) because future cash flows are discounted more heavily, reducing their present value.

An Increase in the Risk-Adjusted Discount Rate Causes the Net