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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