Based on the Payback Rule, Which of the Following Is

question 360

Multiple Choice

Based on the payback rule, which of the following is false?

• A) With a payback cutoff of 1.5 years, both projects are unacceptable.
• B) With a payback cutoff of three years, both projects are acceptable.
• C) With a payback cutoff of one year, neither project is acceptable.
• D) Since both projects pay back, the NPV of both must be positive.
• E) You would be indifferent between the two projects.

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Definitions:

Investments

Allocation of resources, such as time, money, or effort, with the expectation of achieving a future return or benefit.

Close Relationships

Significant personal connections between individuals, characterized by emotional depth, commitment, and interdependence.

Independence

The condition of being free from dependence, influence, or control by others, often associated with self-reliance.

Trust

The firm belief in the reliability, truth, ability, or strength of someone or something, essential for social cohesion and cooperation.