Two Investments Have the Same Total Cash Inflows and the Same

question 76

Multiple Choice

Two investments have the same total cash inflows and the same payback period. Therefore:

• A) These two investments are equally desirable.
• B) These two investments must be identical in terms of the present value of the cash inflows.
• C) The payback period method can help decision makers choose between these two investments.
• D) One pattern of cash inflows may, in a present value sense, be preferable to the other investment's pattern of cash inflows.
• E) Most likely, these two investments required approximately the same initial investment.

---

Definitions:

Vertical Price Fixing

An illegal practice where parties at different levels of the same supply chain (such as manufacturers and retailers) agree to set and maintain prices at a certain level.

Minimum Retail Price

The lowest price at which a retailer can sell a product, often set by the manufacturer to maintain market value.

Independent Buyers

Individuals or entities that make purchasing decisions autonomously, without being influenced by sellers.

Competitive Collusion

An illegal agreement between rivals to set prices, limit production, or divide markets, undermining fair competition.