All Else Equal, the Payback Period for a Project Will

question 97

Multiple Choice

All else equal, the payback period for a project will decrease whenever the:

• A) Initial cost increases.
• B) Required return for a project increases.
• C) Assigned discount rate decreases.
• D) Cash inflows are moved forward in time.
• E) Duration of a project is lengthened.

---

Definitions:

Expenses

Costs incurred in the operation of a business to generate revenue.

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company’s balance sheet.

Journalizing

The process of recording business transactions in the accounting journals as part of the bookkeeping process.

Transaction

An agreement or exchange between two parties that is recorded and has an economic impact on the finances of a business.