A project that has been under review for some time has been modified so that the cash
receipts will remain the same, but their timing will be brought forward throughout the
length of the project. How will this affect the project’s internal rate of return and net
present value (using a positive risk discount rate)?
A The internal rate of return and net present value will both decrease.
B The internal rate of return and net present value will both increase.
C The internal rate of return will increase and the net present value will decrease.
D The internal rate of return will decrease and the net present value will increase
May I know why the answer is B?
receipts will remain the same, but their timing will be brought forward throughout the
length of the project. How will this affect the project’s internal rate of return and net
present value (using a positive risk discount rate)?
A The internal rate of return and net present value will both decrease.
B The internal rate of return and net present value will both increase.
C The internal rate of return will increase and the net present value will decrease.
D The internal rate of return will decrease and the net present value will increase
May I know why the answer is B?