An international project's NPV is ____ related to the size of the initial investment and ____ related to the project's required rate of return.

Question

Quizplus · Accepted Answer

The NPV (Net Present Value) of a project is negatively related to the size of the initial investment because a larger initial investment reduces the NPV. It is also negatively related to the project's required rate of return because a higher required rate of return decreases the present value of future cash flows, thus reducing the NPV.

An International Project's NPV Is ____ Related to the Size