When Calculating a Project's Payback Period, Cash Flows Are Discounted

question 98

Multiple Choice

When calculating a Project's payback period, cash flows are discounted at:

• A)the opportunity cost of capital.
• B)the internal rate of return.
• C)the risk-free rate of return.
• D)a discount rate of zero.

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Definitions:

Supply and Demand

The fundamental economic model describing the balance between the quantity of goods available and the desire of buyers for it.

Marginal Utility

The additional satisfaction a consumer gains from consuming one more unit of a good or service.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision or choice.

Consumption Time

The duration or period during which a consumer utilizes or enjoys a product or service.