Start learning →

In the NPV method, cash flows are discounted at which rate?

AThe rate of inflation
BThe cost of capital
CThe bank deposit rate
DThe dividend rate
Answer & Solution
Correct answer: B. The cost of capital
NPV discounts the project cash flows at the firm's cost of capital to get the value added to the firm.
Practise this question with Quill — CA Inter →

Keep practising Capital Budgeting

Browse all Capital Budgeting questions for CA Inter, or explore more Financial Management topics.

Start a Capital Budgeting lesson →
Related questions