If a Payback Period for a Project Is Greater Than

question 150

Multiple Choice

If a payback period for a project is greater than its expected useful life, the

• A) project will always be profitable.
• B) entire initial investment will not be recovered.
• C) project would only be acceptable if the company's cost of capital was low.
• D) project's return will always exceed the company's cost of capital.

---

Definitions:

Troubled Business

A company experiencing operational or financial difficulties, potentially leading to bankruptcy or restructuring.

Financial Statements

Compiled accounting documents showing the financial position, performance, and cash flows of a company, providing an overview of its financial health and operations.

Fully Secured Liability

A debt or obligation that is backed by collateral, ensuring security for the lender even in the event of borrower default.

Statement of Financial Affairs

A detailed report submitted by a company in bankruptcy proceedings, summarizing its assets, liabilities, income, and creditors.