提问

问题如下：

Erin Chou is reviewing a profitable investment project that has a conventional cash flow pattern. If the cash flows for the project, initial outlay, and future after-tax cash flows all double, Chou would predict that the IRR would:

选项：

A.

increase and the NPV would increase.

B.

stay the same and the NPV would increase.

C.

stay the same and the NPV would stay the same.

解释：

B is correct.

The IRR would stay the same because both the initial outlay and the after-tax cash flows double, so that the return on each dollar invested remains the same. All of the cash flows and their present values double. The difference between total present value of the future cash flows and the initial outlay (the NPV) also doubles.