A Project Has a Required Payback Period of Three Years

question 14

Multiple Choice

A project has a required payback period of three years.Which one of the following statements is correct concerning the payback analysis of this project?

• A)The cash flows in each of the three years must exceed one-third of the project's initial cost if the project is to be accepted.
• B)The cash flow in year three is ignored.
• C)The project's cash flow in year three is discounted by a factor of (1 + R)³.
• D)The cash flow in year two is valued just as highly as the cash flow in year one.
• E)The project is acceptable whenever the payback period exceeds three years.

Calculate the present value of immediate and deferred cash flows to compare financial options.

Conceptualize how payment frequency and timing affect the value of annuities and loans.

Assess the worth of growing annuities and perpetuities using given financial formulas.

Evaluate investment options based on future value and present value calculations.

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Definitions:

Allylic Halide

A halogenated compound where the halogen atom is positioned adjacent to a carbon-carbon double bond.

Grignard Reagent

An organomagnesium compound used in a variety of synthetic reactions in organic chemistry to form carbon-carbon bonds.

Diastereomers

Stereoisomers that are not mirror images of each other and have different chemical and physical properties.

Optically Active

Refers to a substance that is capable of rotating the plane of polarized light, indicating the presence of chiral molecules.