A Project's Payback Period Is Determined to Be 4 Years

question 24

Multiple Choice

A project's payback period is determined to be 4 years.If it is later discovered that additional cash flows will be generated in years 5 and 6,then the project's payback period will:

• A) be reduced.
• B) be increased.
• C) be unchanged.
• D) change but the discount rate must be known to determine the nature of the change.

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Definitions:

Auctioneer

An individual or company that conducts auctions by accepting bids and declaring goods sold to the highest bidders.

First-Price Auctions

A type of auction in which the highest bid wins, and the winner pays the amount of their bid.

Highest Bid

The largest amount of money offered for a good or service in an auction.

Second-Highest Bidder

In auctions, the participant who places the second greatest bid, often relevant in contexts where the winner pays the price submitted by this bidder.