Which is a true statement regarding using a higher discount rate to calculate the net present value

Question:

Which is a true statement regarding using a higher discount rate to calculate the net present value of a project?

(a) It will make it less likely that the project will be accepted.

(b) It will make it more likely that the project will be accepted.

(c) It is appropriate to use a higher rate if the project is perceived as being less risky than other projects being considered.

(d) It is appropriate to use a higher rate if the project will have a short useful life relative to other projects being considered.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial And Managerial Accounting

ISBN: 9781118004234

1st Edition

Authors: Donald E. Kieso, Paul D. Kimmel, Jerry J. Weygandt

Question Posted: Feb 15, 2024 08:22 AM

See More Questions

Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
Ques 1: What is the major complaint by firms concerning the Sarbanes-Oxley act of 2012? A. the legislative maximum allowable compensation for a CEO. B. the legal requirement to disclose project...
CoursHeroTranscribedText: A 5-year loan in the amount of $48,000 is to be repaid in equal annual payments. What is the remaining principal balance after the third payment if the interest rate is 5...
H. S. Black is noted for developing a negative feedback amplifier in 1927. Often overlooked is the fact that three years earlier he had invented a circuit design technique known as feed forward...
The legal firm of West, Green, and Ink uses ABC to allocate its overhead costs. The firm has identified the following activity cost pools: Match these cost pools with the appropriate cost driver...
AssumeyouaretheAthleticDirectorofahighschool.Duetoitssuperior condition,theschool'sbaseballfieldisadaptedforsoftballplaywheneverthe softballteammakesthestateplayoffs.Oneadaptationistoshortenthebase...
What are the typical variables used in indexing and ranking? lo1
In March 2018, the management team of Londonderry Air (LA) met to discuss a proposal to purchase five shorthaul aircraft at a total cost of $25 million. There was general enthusiasm for the...
Campbell, Inc. produces and sells outdoor equipment. On July 1 , 2 0 Y 1 , Campbell issued $ 4 0 , 0 0 0 , 0 0 0 of 1 0 - year, 1 0 % bonds at a market ( effective ) interest rate of 9 % , receiving...
Cornfield Company is considering a long-term capital investment project in laser equipment. This will require an investment of $280,000, and it will have a useful life of 5 years. Annual net income...
Watertown Paper Corporation is considering adding another machine for the manufacture of corrugated cardboard. The machine would cost $900,000. It would have an estimated life of 6 years and no...
Although the additive approach traditionally used for coupling Fickian diffusion with convection appears logical and works for calculating total fluxes of $A$ and $B$, this is not the only way...
Question 2: Response to John Ripley?
Prepare a summary of the effects of the "fat tax" on the demand and supply diagram. Ensure you talk about the dead weight loss. PRICE D Tax Revenue S P1 P2 TAX P3 Dead Weight Loss QUANTITY QeAT QeBT...
Trade causes production in Home to move from point A to point B. What does this mean happened to the relative price of Qc? QF Home QF1 A QF2 Qc Qc2 Qc2
Write as an ordered pair the coordinates of the point whose y-coordinate is 3 and whose x-coordinate is -7. X Viewing Saved Work Revert to Last Response
1. A cereal manufacturer tests their equipment weekly to be assured that the proper amount of cereal is in each box of cereal. The company wants to see if the amount differs from the stated amount on...
In an article in the Journal of Management Information Systems, Mahmood and Mann investigate how information technology (IT) investment relates to company performance. In particular, Mahmood and Mann...
Suppose that the electrical potential at the point (x, y, z) is E(x, y, z) = x + y - 2z. What is the direction of the acceleration at the point (1,3,2)?
Michael McNamee is the sole shareholder of a property management company near the campus of Pensacola State College. The business has cash of $8,000 and furniture that cost $9,000 and has a market...
Turtle Creek Kennel, Inc., earns service revenue by caring for the pets of customers. Turtle Creeks main expense is the salary paid to an employee. Requirement 1. Write the accounting equation for...
Monte Hall Gaming, Inc., paid $26,000 cash to purchase land. Requirement 1. Identify which accounts were affected by this transaction and the amount of the change.
(15 points) Stressed $2.500,000 of S% 20 year bands. These bonds were issued Jary 1, 2017 and pay interest annually on each January 1. The bonds yield 3% and was issued at $325 8S! Required (2)...
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for...
1. A company issued 10%, 10-year bonds with a par value of $1,000,000 on January 1, at a selling price of $885,295 when the annual market interest rate was 12%. The company uses the effective...

Which is a true statement regarding using a higher discount rate to calculate the net present value

Question:

Step by Step Answer:

Financial And Managerial Accounting

Students also viewed these Business questions