What would happen to the NPV and PI for each project if the required rate of return increased?

If the required rate of return increases, the Net Present Value (NPV) of each project would typically decrease, as future cash flows are discounted at a higher rate, reducing their present value. Consequently, the Profitability Index (PI), which is the ratio of the present value of cash flows to the initial investment, would also decline. A higher required rate makes projects less attractive, potentially leading to some projects being deemed unviable if their NPV turns negative. Overall, an increase in the required rate of return generally diminishes the financial appeal of investment projects.