A capital investment project will have a higher net present value, everything else being equal, if it has:
A) A higher initial investment level.
B) A higher discount rate.
C) Cash inflows that are larger in the later years of the life of the project.
D) Cash inflows that are larger in the earlier years of the life of the project.

Question

Quizplus · Accepted Answer

Cash inflows that are larger in the earlier years of the project increase the net present value because they are discounted less, making them more valuable in present terms.

A Capital Investment Project Will Have a Higher Net Present