If a Project Has a Payback Period of 5 Years

question 23

Multiple Choice

If a project has a payback period of 5 years and a cost of capital of 10%,then the discounted payback will:

• A) exceed 5 years.
• B) be less than 5 years.
• C) decrease if the cost of capital increases.
• D) decrease if the payback period increases due to revised cash flows.

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Definitions:

Unification

The process of making or becoming united or whole, often referring to the consolidation of territories, organizations, or rules into a single entity.

International Monetary Fund (IMF)

Organization created to promote trade, eliminate barriers, and make short-term loans to member nations that are unable to meet their budgets.

Financial Cooperation

Collaboration among businesses, governments, or countries to achieve common financial goals or manage financial risks.

WTO

The World Trade Organization, an intergovernmental organization which regulates international trade.