A Project Has a Discounted Payback Period That Is Equal

question 43

Multiple Choice

A project has a discounted payback period that is equal to the required payback period.Given this,which of the following statements must be true?
I.The project must also be acceptable under the payback rule.
II.The project must have a profitability index that is equal to or greater than 1.0.
III.The project must have a zero net present value.
IV.The project's internal rate of return must equal the required return.

• A)I only
• B)I and II only
• C)II and III only
• D)I, III, and IV only
• E)I, II, III, and IV

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Definitions:

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost per unit than the cost at which any other entity can produce it.

Opportunity Costs

The loss of potential gain from other alternatives when one particular option is chosen over others.

Predatory Dumping

A practice where a company exports a product at a price significantly lower than its normal value, with the intention to drive out competition in the import country.

Sporadic Dumping

Occurs when a company exports a product at a price significantly lower than the price in its domestic market, but does so irregularly or occasionally.