Consider a project with an initial investment and positive future cash flows. As the cost of capital is increased, the:

A) IRR remains constant while NPV increases.
B) IRR decreases while NPV remains constant.
C) IRR remains constant while NPV decreases.
D) IRR increases while NPV remains constant.
E) IRR decreases while NPV decreases.

Cost of Capital

The necessary rate of earnings a firm must obtain from its investments to preserve its market worth and secure capital.

Initial Investment

The amount of money invested at the start of a project or business venture to get it off the ground.

Positive Future Cash Flows

The expectation or projection of an increase in the amount of money flowing into a company over a period of time, typically resulting from operations, investments, or financing activities.