This would decrease the NPV. If a project is judged to have average risk, its discount rate will be higher than it would be if the project is judged to be low risk. Increasing the discount rate used would cause the present value of all of the cash inflows to be lower and the NPV to be lower.
This would cause the expected cash inflows in the final year of the project to be lower. That in turn would cause the present value of that cash inflow to be lower, which would cause the NPV to be lower.
If a cash outflow can be postponed to a later year, the present value of that cash outflow will decrease. When the present value of a cash outflow is decreased, the NPV increases. Of course, for this to be meaningful, the company really will have to postpone that major overhaul to Year 5 when the project is actually underway. It cannot be planned for Year 5 in the capital budgeting analysis but then done in reality in Year 4. Furthermore, postponing the overhaul must be reasonable. If the equipment actually needs to be overhauled in Year 4 but the overhaul is postponed until Year 5, the equipment may be subject to breakdowns because of not being overhauled when it needed to be. That will cause the actual cost of the project to increase and the net income from the project to decrease, resulting in less net income from the project than expected.
This would decrease the NPV because it would increase the present value of the cash outflows for the marketing expense.
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