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Toomas evaluates a profitable investment project with a normal cash flow pattern

Finance

Toomas evaluates a profitable investment project with a normal cash flow pattern. Assume that when performing a sensitivity analysis, all project cash flows (including initial investment, annual operating cash flows, and closing cash flows) are doubled, the most likely impact is that: Select one: a. IRR increases and NPV stays constant b. both IRR and NPV stay constant C. IRR stays constant and NPV increases d. IRR increases and NPV decreases

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Option c. is correct

When all project cash flows are doubled, IRR stays the same. However, the NPV is also doubled.