True. Discount rate used in the initial stages of a project should generally be lower than discount rates used later in a project.
A lower discount rate equates to a greater present value because it implies that money will develop slowly over time given the lower rate of earning at the beginning of the project due to higher risk.
The discount rate is employed to articulate the monetary value of the future in today's terms. When compared to a lower rate, using a higher discount rate decreases the value of the future stream of net benefits or costs. As a result, a higher discount rate implies that we value benefits less as they become further in the future.
The discount rate should be equal to the current rate of return on similar stabilized investment opportunities.
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