Which of the Following Statements Is True of a Project

question 54

Multiple Choice

Which of the following statements is true of a project whose cash flows accrue relatively rapidly?

• A) The payback period is longer than the years expected to recover the original investment.
• B) The net present value is not very sensitive to changes in the discount rate.
• C) The required rate of return is revised throughout the duration of the project.
• D) The net present value of the project is always negative if cash flows accrue rapidly.
• E) The project will have multiple internal rates of return due to rapidly accruing cash flows.

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