Which one of the following will decrease the net present value of a project?
A)increasing the value of each of the project's discounted cash inflows
B)moving each of the cash inflows back to a later time period
C)decreasing the required discount rate
D)increasing the project's initial cost at time zero
E)increasing the amount of the final cash inflow

Question

Quizplus · Accepted Answer

Increasing the project's initial cost at time zero will increase the amount of money needed upfront and will decrease the net present value of the project. This is because the present value of future cash inflows will be reduced more than the increase in initial cost. Therefore, option D is the correct answer.

Which One of the Following Will Decrease the Net Present