You Are Considering a Project with Conventional Cash Flows

question 57

Multiple Choice

You are considering a project with conventional cash flows.The IRR is 12.6 percent,NPV is -$198,and the payback period is 2.87 years.Which one of the following statements is correct given this information?

• A)The discount rate used in computing the net present value was less than 12.6 percent.
• B)The discounted payback period will have to be less than 2.87 years.
• C)The project life must be 2.87 years.
• D)This project should be accepted based on the internal rate of return.
• E)The required rate of return must be greater than 12.6 percent.

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