Firms May Select Projects with Short Paybacks Because

question 34

Multiple Choice

Firms may select projects with short paybacks because

• A)projects with longer paybacks may be riskier.
• B)shorter paybacks may help reduce liquidity problems.
• C)if the risk of obsolescence is high, the firm may want to recover the funds rapidly.
• D)All of the above are correct.

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Definitions:

Experience

Pertains to the knowledge or skill acquired by a person over a period of time through involvement in or exposure to events.

Crop Yields

The quantity of a crop that is harvested per unit of land area.

Growing Season

The period of the year during which climatic conditions are suitable for plants to grow.

Traditional Thinking

A mindset adhering to long-established beliefs, values, and practices, often resistant to change.