Which of the following changes would be likely to increase the NPV of a project?
A)increasing the firm's opportunity cost of capital.
B)permitting a net decrease in working capital.
C)spreading the total cash inflows over a longer interval.
D)increasing the project's estimated expenses.

Question

Quizplus · Accepted Answer

All other things being equal, a net decrease in working capital would result in a higher NPV because the decrease in working capital would increase the present value of the project's cash inflows. A higher opportunity cost of capital, spreading total cash inflows over a longer interval, or increasing the project's estimated expenses would all lead to a lower NPV.

Which of the Following Changes Would Be Likely to Increase