Long term projects often offer high rate of return than short term projects. Just because it offers a high rate of return, it does not mean that it will have a higher NPV. The opposite is true for short-term bonds. If short-term bonds are offering a lower rate of return, it does not mean that it will have a lower NPV.
Keep the following things in mind:
Links of Previous Main Topic:-
- Working with time varying rates of return
- Study of treasury bills and yield curve in time varying interest rates
- Why is the slope of yield curve upward
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