Dollar effect on the net present value


Which of the following will have the largest dollar effect on the net present value of a 10 year investment project?

A. a decrease of $20,000 in the initial investment required with no effect on the expected salvage value in 10 years.

B. an increase of $20,000 in the expected salvage value in 10 years with no effect on the initial investment.

C. a decrease of $20,000 in both the working capital needed to start the project and the amount being released at the end of the 10 years.

D. an increase of $2,000 in the annual cash inflows from this project

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Accounting Basics: Dollar effect on the net present value
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