In general, projects with similar-sized investments and lower early-year cash inflows (lower cash inflows in the early years) tend to be preferred at higher discount rates.

Question

Quizplus · Accepted Answer

Projects with lower early-year cash inflows are less attractive at higher discount rates because the present value of future cash inflows is reduced more significantly, making them less appealing compared to projects with higher early-year cash inflows.

In General, Projects with Similar-Sized Investments and Lower Early-Year Cash