Question

In: Finance

Other factors being constant, NPV of an international project is__ related to consumer demand and __ related to the project's salvage value.

Other factors being constant, NPV of an international project is__ related to consumer demand and __ related to the project's salvage value.

a.positively; positively

b.positively; negatively

c.negatively; positively

d.negatively; negatively

Solutions

Expert Solution

Option a is correct

NPV of an international project is positively related to consumer demand and positively related to the project's salvage value, all else being equal.

In other words, an increase in consumer demand will increases the NPV and vice versa.

And, an increase in salvage value increases NPV and vice versa.

These factors are not negatively related to NPV and hance other answer options are incorrect

jeff jeffy answered 2 years ago
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