Question

What happens,when greater the interest rate other things being equal? what happens NPV?

Answer 1

• Higher discount rates mean cash flows that occur sooner are more influential to NPV. Since the earlier payments tend to be the outflows, the NPV profile generally shows an inverse relationship between the discount rate and NPV.

Answer 2

Higher discount rates mean cash flows that occur sooner are more influential to NPV. Since the earlier payments tend to be the outflows, the NPV profile generally shows an inverse relationship between the discount rate and NPV.

HOPE IT HELPS YOU ☺ ☺