A firm is evaluating a project that has a net present value of $0 when a discount rate of 10% is used.What will be the result of a discount rate of 8%?

Question

Quizplus · Accepted Answer

When the discount rate is lower, the present value of future cash flows is higher, which could potentially lead to a positive net present value. Therefore, using a discount rate of 8% could result in a positive net present value for the project.

A Firm Is Evaluating a Project That Has a Net