As the discount rate is increased,the NPV of a specific project will:
A) increase.
B) decrease.
C) remain constant.
D) decrease to zero, then remain constant.

Question

Quizplus · Accepted Answer

The discount rate is the rate of return that an investor expects to earn on an investment. As the discount rate increases, the present value of future cash flows decreases, which leads to a decrease in the net present value (NPV) of a specific project. Therefore, NPV will decrease as the discount rate increases.

As the Discount Rate Is Increased,the NPV of a Specific