A project has the following cash flows: C₀ = -100,000; C₁ = 50,000; C₂ = 150,000; C₃ = 100,000.If the discount rate changes from 12% to 15%,what is the CHANGE in the NPV of the project (approximately)? A)12,750 increase B)12,750 decrease C)14,240 increase D)14,240

Question

Quizplus · Accepted Answer

The NPV decreases when the discount rate increases. Calculating the NPV at both 12% and 15% and finding the difference shows an approximate decrease of 12,750.

A Project Has the Following Cash Flows: C0 = -100,000;

A Project Has the Following Cash Flows: C₀ = -100,000;