Based on the Payback Rule, Which of the Following Is

question 271

Multiple Choice

Based on the payback rule, which of the following is false?

• A) With a payback cutoff of 1.5 years, both projects are unacceptable.
• B) With a payback cutoff of three years, both projects are acceptable.
• C) With a payback cutoff of one year, neither project is acceptable.
• D) Since both projects pay back, the NPV of both must be positive.
• E) You would be indifferent between the two projects.

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Definitions:

Hepatic Portal Vein

The hepatic portal vein is a blood vessel that carries nutrient-rich blood from the gastrointestinal tract and spleen to the liver for filtering and processing.

Superior Mesenteric Vein

A major vein draining blood from the small intestine, ascending colon, and part of the transverse colon.

Popliteal Vein

A vein located behind the knee that drains blood from the lower leg and transports it back towards the heart.

Saphenous Vein

The longest vein in the body, running along the length of the leg, and often used in coronary artery bypass surgery.