Question
Suppose the cash flows of the project is as follows: Today, you need to spend an upfront cost and will receive four positive cash flows
Suppose the cash flows of the project is as follows: Today, you need to spend an upfront cost and will receive four positive cash flows in the next four years. Suppose the NPV of the project is positive with a discount rate of r (r > 0).
Which of the following statement is false?
A.If the upfront cost becomes larger, then the NPV might become negative.
B.If the cash flow next year (CF1) becomes larger, then the NPV will be greater as well.
C.If the discount rate is higher, then the NPV will be greater as well.
D.Since the NPV is positive, you should accept the project.
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