A Project Has a Payback Period of Five Years and the Firm

question 75

Multiple Choice

A project has a payback period of five years and the firm employs a 10 percent cost of capital.Which of the following statements is correct concerning this Project's discounted payback?

• A)discounted payback will exceed five years.
• B)discounted payback will be less than five years.
• C)discounted payback will decrease if the Project's IRR exceeds 10 percent.
• D)discounted payback will increase if the Project's IRR is less than 10 percent.

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Definitions:

Other Resources

Assets other than financial that can be used by a company to achieve its goals, such as human capital, technology, and intellectual property.

Conceptual Skills

The ability to understand complex ideas, identify patterns, and solve problems by seeing the 'big picture', often crucial for strategic planning and management.

Supervisors

Supervisors are individuals in charge of overseeing the performance of workers or tasks within an organization, ensuring that operations run smoothly and efficiently.

Long-range Plans

Long-range plans are strategic frameworks that outline an organization's goals and objectives over an extended period, often spanning several years into the future.