Which of the Following Statements Is True When a Project's

question 69

Multiple Choice

Which of the following statements is true when a project's discounted payback is less than its useful life?

• A) The terminal value of the future cash flows that the project is expected to generate is less than the future value of the initial cost of the asset.
• B) The future cash flows that the project is expected to generate are less than the initial cost of the asset.
• C) The present value of the future cash flows that the project is expected to generate exceeds the initial cost of the asset.
• D) The future value of the cash flows from the resale of the asset acquired for the project is expected to exceed the initial cost of the asset.
• E) The cost recovery from the project is expected to exceed the maximum cost-recovery time established by the firm.

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Definitions:

Boomerang Generation

Term used to describe those young adults who return to their parental home after leaving for education, work, or a relationship.

Blended Family

A family unit composed of a couple and their children from this and all previous relationships, creating a complex network of relationships.

Domestic Partnership

A legally recognized relationship between two individuals who live together and share a domestic life but are not married.

Civil Union

A legally recognized union of a couple, similar to marriage, that can offer similar protections and rights without the religious or social connotations of marriage.