An Investment Project Is Most Likely to Be Accepted by the Payback

question 1

Multiple Choice

An investment project is most likely to be accepted by the payback period rule and not accepted by the NPV rule if the project has:

• A) a large initial investment with moderate positive cash flows over a very long period of time.
• B) a very large negative cash flow at the termination of the project.
• C) most of the cash flow at the beginning of the project.
• D) All projects approved by the payback period rule will be accepted by the NPV rule.
• E) The payback period rule and the NPV rule cannot be used to evaluate the same type of projects.

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Definitions:

Fetal Alcohol Syndrome

A condition in a child resulting from alcohol exposure during the mother's pregnancy, causing brain damage and growth problems.

Heavy Drinking

Consumption of alcohol in large quantities over a short period of time, potentially leading to acute and chronic health problems.

Pregnancy

A term for the period during which a woman carries a developing fetus inside her uterus, typically lasting around 40 weeks from the last menstrual period.

Small Head

Generally refers to a medical condition where the circumference of the head is significantly smaller than typical for an individual's age and sex, known as microcephaly.