Question

A project that incurs costs in early years and yields benefits in later years has been estimated to have costs just equal to benefits, in present value terms and ignoring risk factors. The project would be reevaluated as having greater benefits than costs if

Answer 1

Answer:

The discount rates were lowered

Explanation:

Discount rate is the rate that is used to determine the present value of future cash flows that will be spent in a project.

This is different from the cost of capital which is the amount that just meets the incurred cost of executing a project.

Discount rate determines of the benefits of the project are greater than the cost.

In the given scenario where benefits balance the cost, the project will be worthwhile is discount rate is lower.

That is there will be a lower cost of execution of the project so revenue will be higher than the cost