A change in the discount rate used to evaluate a specific project will affect the project's
A)life.
B)payback period.
C)net present value.
D)total cash flows.

Question

Quizplus · Accepted Answer

A change in the discount rate, which is used to calculate the present value of future cash flows, will directly affect the project's net present value (NPV). A higher discount rate will decrease the project's NPV, while a lower discount rate will increase it. The project's life, payback period, and total cash flows are not directly affected by the discount rate change.

A Change in the Discount Rate Used to Evaluate a Specific