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    Corporate Finance
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    Exam 10: The basics of capital budgeting: evaluating cash flows
  5. Question
    Normal Projects S and L Have the Same NPV When
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Normal Projects S and L Have the Same NPV When

Question 103

Question 103

True/False

Normal Projects S and L have the same NPV when the discount rate is zero.However, Project S's cash flows come in faster than those of L.Therefore, we know that at any discount rate greater than zero, L will have the higher NPV.

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