Normal Projects Q and R have the same NPV when the discount rate is zero. However, Project Q has larger early cash flows than R. Therefore, we know that at all discount rates greater than zero, Project R will have a greater NPV than Q.

Question

Quizplus · Accepted Answer

We cannot make this conclusion based solely on the information given. The timing and size of cash flows can have different impacts on NPV at different discount rates. We would need more information or calculations to determine which project has a higher NPV at higher discount rates.

Normal Projects Q and R Have the Same NPV When