Net present value (npv), Elaborate on why the net present

Net present value (npv)

Reference no: EM1327174

Elaborate on why the net present value (NPV) of a relatively long-term project is more sensitive to changes in the cost of capital than is the NPV of a short-term project. Provide two good examples of NPV that support your position.

From the e-Activity, analyze the reasons why the short-term project that you have chosen might be ranked higher under the NPV criterion if the cost of capital is high, while the long-term project might be deemed better if the cost of capital is low.

Determine whether or not changes in the cost of capital could ever cause a change in the internal rate of return (IRR) ranking of two (2) such projects. Provide an appropriate example of such a change—or the lack of one—to support your position.

Reference no: EM1327174

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