Question
UW-Madison is considering constructing a new women's volleyball venue on campus. New data surfaces suggesting that future maintenance costs for the facility will be higher
UW-Madison is considering constructing a new women's volleyball venue on campus. New data surfaces suggesting that future maintenance costs for the facility will be higher than previously expected. This new data will __________ the net present value (NPV) of the venue and ________ its internal rate of return (IRR).
a. Raise ; raise b. Raise ; reduce c. Reduce ; raise d. Reduce ; reduce
I was thinking that as times goes on the value of money is decreasing so future value is worsen then present value, so I picked reduced NPV and if NPV<0 and ISS<0.
Is this correct?
Thank you!
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