Suppose You Have a Project Whose Discounted Payback Is Equal

question 13

Multiple Choice

Suppose you have a project whose discounted payback is equal to its termination date. What can you say for sure about its PI?

• A) The discounted payback will be greater than zero.
• B) It will have a PI and NPV of zero.
• C) The NPV and IRR will yield the same decision.
• D) The IRR will just equal the cost of capital.

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Definitions:

Acetic Acid

Acetic acid is a weak carboxylic acid with the chemical formula CH3COOH, recognizable by its sour taste and pungent smell, commonly found in vinegar.

Isopropyl Alcohol

A secondary alcohol commonly used as a solvent and disinfectant, known for its ability to evaporate quickly.

Acetone

A volatile, colorless solvent widely used in organic chemistry and as a nail polish remover, known for its ability to dissolve many plastics and synthetic fibers.

Reactive Intermediate

Transitory species that are formed during a chemical reaction and participate in further reaction steps until the final products are produced.