Which of the following would decrease the net present value of a project?
A) A decrease in the income tax rate.
B) A decrease in the initial investment.
C) An increase in the useful life of the project.
D) An increase in the discount rate.

Question

Quizplus · Accepted Answer

An increase in the discount rate would increase the present value of the future cash flows and thus decrease the net present value of the project. A decrease in income tax rate, decrease in initial investment, and an increase in the useful life of the project would all increase the net present value of the project.

Which of the Following Would Decrease the Net Present Value