-If the discount rate for the project is changed to 10%, find the total net present value.
A)$98,875.51
B)$345,500.00
C)$538,481.25
D)$172,727.27
E)Do not have enough information to compute

Question

-If the discount rate for the project is changed to 10%, find the total net present value.
A)$98,875.51 
B)$345,500.00 
C)$538,481.25 
D)$172,727.27 
E)Do not have enough information to compute

Quizplus · Accepted Answer

The correct answer is A because the net present value is calculated by discounting the future cash flows back to the present at a given discount rate. If the discount rate is changed, the net present value will also change. In this case, the discount rate is changed from 5% to 10%, which will result in a lower net present value.

-If the Discount Rate for the Project Is Changed to 10