Which of the Following Statements Is True of a Project

question 34

Multiple Choice

Which of the following statements is true of a project with a long payback period?

• A) A long payback period increases the project's risk.
• B) A long payback period ensures enough liquidity for the firm.
• C) A long payback period ensures positive net present value of the project.
• D) A long payback period results in the expected rate of return being more than the internal rate of return.
• E) A long payback period results in the terminal value of the project being higher than the present value of its cash outflows.