Which one of the following changes, if of a sufficient magnitude, could turn a negative NPV project into a positive NPV project?
A) A decrease in the estimated annual sales
B) An increase in the discount rate
C) An increase in the initial investment
D)A decrease in the fixed costs

Question

Quizplus · Accepted Answer

A decrease in fixed costs would decrease the overall costs of the project, which would increase the project's net cash inflows and ultimately lead to a positive NPV. The other options would have the opposite effect and decrease the NPV.

Which One of the Following Changes, If of a Sufficient