Explain why the NPV of a relatively long-term project, defined as one for whicha high percentage of its cash flows are expected in the distant future, is moresensitive to changes in the cost of capital than is the NPV of a short-term project
Explain why the NPV of a relatively long-term project, defined as one for whicha high percentage of its cash flows are expected in the distant future, is moresensitive to changes in the cost of capital than is the NPV of a short-term project
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 3Q
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Explain why the
a high percentage of its cash flows are expected in the distant future, is more
sensitive to changes in the cost of capital than is the NPV of a short-term project
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