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A Company Used the Net-Present-Value Method to Analyze an Investment

Question 27

Multiple Choice

A company used the net-present-value method to analyze an investment and found the investment to be very attractive. If the firm used straight-line depreciation and changes to the Modified Accelerated Cost Recovery System (MACRS) , the investment's net present value will:


A) increase.
B) remain the same.
C) decrease.
D) change, but the direction cannot be determined based on the data presented.
E) fluctuate in an erratic manner.

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