A Project Has a Required Return of 15% and a fiVe

question 98

Multiple Choice

A project has a required return of 15% and a five year life. Which of the following is inconsistent with the other four?

• A) The discounted payback is five years
• B) PI = 0
• C) NPV = $0
• D) IRR = 15%
• E) The present value of the future cash flows equals the initial outlay

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Definitions:

Liquid Assets

Assets that can be quickly and easily converted into cash without significantly affecting their value.

Financial Ratios

Quantitative measures derived from a business's financial statements, used to evaluate its performance, liquidity, and financial health.

Managerial Accounting

A branch of accounting focused on providing financial data and analysis to managers within organizations to inform decision-making.

Prescriptive

Pertaining to the detailed specification of a set of recommendations or rules designed to solve a problem or improve a situation.