When Calculating a Project's Payback Period, Cash Flows Are Discounted

question 98

Multiple Choice

When calculating a Project's payback period, cash flows are discounted at:

• A)the opportunity cost of capital.
• B)the internal rate of return.
• C)the risk-free rate of return.
• D)a discount rate of zero.

---

Definitions:

Empirical Evidence

Information derived from observation or experimentation that serves as the basis for knowledge or theory.

Defined Benefit Pension Fund

A type of pension plan in which an employee receives a predetermined monthly payment in retirement, the amount of which is based on salary history and length of service.

Actuarial Assumed Rate

Actuarial Assumed Rate is the interest rate estimate used by actuaries to calculate the present value of future pension obligations or insurance liabilities.

Legal Title

The formal ownership of property, which includes the rights to use, manage, and dispose of the property.