In an investment project, the lower the rate of interest
A)No significant change in the value of the project
B)The lower the present value of the project
C)The higher the present value of the project
D)None of the above

Question

Quizplus · Accepted Answer

The lower the rate of interest, the higher the present value of the project because future cash flows are discounted at a lower rate, making them more valuable in present terms.

In an Investment Project, the Lower the Rate of Interest