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You have been analyzing a project. It would require an investment of $ 1 0 million and produce positive cashflows for 1 0 vears. Based
You have been analyzing a project. It would require an investment of $ million and produce positive cashflows for vears. Based upon the characteristics of this project, you used a cost of capital of r Applying the
NPV Criteria, you decided to accept the project. When presenting the results to your manager, she informs you that you should have used as the cost of capital. Does this affect your investment decision?
A Yes. decreasing the cost of capital increases the NDV
B Yes, decreasing the cost of capital decreases the NPV
OC
No decreasino the cost or capital increases the NeV
D No decreasing the cost of capital decreases the NPV
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