Everything Else Equal, a Project That Has a Long Traditional

question 53

Multiple Choice

Everything else equal, a project that has a long traditional payback period (PB) _____. 

• A)has greater implied risk than a project that has a shorter PB
• B)generally ensures the firm has enough liquidity to survive for a fairly long period of time
• C)must have a positive net present value (NPV)
• D)has an expected rate of return that is greater its internal rate of return
• E)results in a terminal value that is greater than the present value of its cash outflows

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Definitions:

Regular Basis

Occurring frequently or at evenly spaced intervals over time.

Earnings

The profit or income generated from work, investments, or business operations after deducting expenses.

Mixed Message

A communication that is conflicting or inconsistent, often leading to confusion or misunderstanding.

Verbal Expression

The process of conveying thoughts, feelings, or ideas through spoken words or in written form.