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A Decrease in the Firm's Discount Rate (R, or WACC)

Question 65

True/False

A decrease in the firm's discount rate (r, or WACC) will INCREASE projects' NPVs, which could change the accept/reject decision for any potential project. However, such a change would have no impact on the project's IRR; therefore, the accept/reject decision under the IRR method is independent of the cost of capital.

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