A project's net present value is increased if
A)the CCA rate is decreased.
B)the discount rate is increased.
C)the CCA rate is increased.
D)the company's net income is negative during the life of the project.
E)the rate of inflation rises.

Question

Quizplus · Accepted Answer

If the CCA (capital cost allowance) rate is increased, it allows for larger depreciation expenses, which will result in larger tax savings and therefore an increase in the project's net present value.

A Project's Net Present Value Is Increased If