NPV calculation: why do textbooks discount a future outflow (investment) that is known for certain at the risky rate (same as risky inflows), rather than at the risk free rate?

Question

anonymous · Answer

see u will be investing first then only u will be able to generate revenue(cash inflow). Reason that cash outflow is discounted at the risky rate because from ur investment only cash inflow will occur. And if u will discount it using the Risk free rate then the project's cost will be high(normally Risk free rate is low).

anonymous · Answer

Thanks a million!!