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Evaluate an investment proposal
Course:- Corporate Finance
Reference No.:- EM13194765




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You quote Oehmke who seem to have said that the NPV could be "increasing as the discount rate increases". I doubt that very much ( assuming the base data stay the same). Could you explain in which circumstances that could be the case?

Secondly, you state that the discount rate could take into account inflation and risk. How would that work in practice. How would you come to a specific discount rate if you are the management accountant that has to evaluate an investment proposal?




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