Please show work Which of the following will have the largest dollar effect on t

Question

Please show work

Which of the following will have the largest dollar effect on the net present value of a 10 year investment project? a decrease of $20.000 in the initial investment required with no effect on the expected salvage value in 10 years. an increase of $20.000 in the expected salvage value in 10 years with no effect on the initial investment. a decrease of $20.000 in both the working capital needed to start the project and the amount being released at the end of the 10 years. an increase of $2,000 in the annual cash inflows from this project.

Explanation / Answer

The correct answer is

a) a decrease of $20000 in the initial investment required with no effect on the expected salvage value in 10 years

This will be due to the time value of money

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