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.

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Definitions:

Design Phase

represents the initial stage in the development of a product or system, focused on determining specifications, features, and functionalities.

Strategic Items

Products or components critical to an organization’s success, requiring careful management to ensure availability and minimize risks.

Performance Improvement

Performance improvement involves measures or initiatives aimed at enhancing the efficiency, effectiveness, or outcome of different processes, systems, or organizations.

Shared Savings Contract

An agreement between two parties where savings generated from cost-reducing measures are divided according to a predetermined formula.