Chapter 12, Problem 9F15

Cardinal Company is considering a five-year project that would require a $2,975,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 14%. The project would provide net operating income in each of five wars as follows:

Required:
(Answer each question by referring to the original data unless instructed otherwise.)
9. If the company’s discount rate was 16% instead of 14%, would von expect the project’s net present value to be higher than, lower than, or the same as answer to requirement 4? No computations e necessary.