The Length of Time Required for an Investment to Generate

question 85

Multiple Choice

The length of time required for an investment to generate cash flows sufficient to recover the initial cost of the investment is called the:

• A) net present value.
• B) internal rate of return.
• C) payback period.
• D) profitability index.
• E) discounted cash period.

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Definitions:

Merger

A strategic business action where two entities consolidate their assets, operations, and management with the aim of fostering growth or competitive advantage.

Shareholder Rights Plan

A defensive strategy used by corporations to deter hostile takeovers by issuing new shares to existing shareholders, making a takeover more expensive.

Hostile Takeover

An acquisition attempt by a company or investor to obtain control of another company against the wishes of the target company's management and board of directors.

Takeover Bid

An offer made to acquire a controlling stake or all of a company's shares, either friendly or hostile.