In computing the net present value of a proposed project, the required rate of return to implement the project will be ______ if interest rates are ________.
A) lower; higher
B) lower; lower
C) higher; lower
D) higher; unchanged

Question

Quizplus · Accepted Answer

The required rate of return is typically aligned with prevailing interest rates. If interest rates are lower, the required rate of return for a project will also be lower, as the cost of borrowing funds is reduced.

In Computing the Net Present Value of a Proposed Project