One way to increase the NPV of a project is to decrease the:
A) project's payback period.
B) profitability index.
C) time until the receipt of cash inflows.
D) number of project IRRs.

Question

Quizplus · Accepted Answer

The time until the receipt of cash inflows is a key factor in calculating the Net Present Value (NPV) of a project. By decreasing the time until cash inflows are received, the discount rate applied to the cash flows is reduced, which in turn increases the NPV. Therefore, decreasing the time until the receipt of cash inflows is an effective way to increase the NPV of a project.

One Way to Increase the NPV of a Project Is