Project C Requires a Net Investment of $1,000,000 and Has

question 32

Multiple Choice

Project C requires a net investment of $1,000,000 and has a payback period of 5.6 years.You analyze Project C and decide that Year 1 free cash flow is $100,000 too low,and Year 3 free cash flow is $100,000 too high.After making the necessary adjustments

• A) the payback period for Project C will be longer than 5.6 years.
• B) the payback period for Project C will be shorter than 5.6 years.
• C) the IRR of Project C will increase.
• D) the NPV of Project C will decrease.

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Definitions:

Hydrogen

A colorless, odorless, tasteless, and highly flammable diatomic gas that is the simplest and lightest element, often used in chemical reactions and as a potential clean energy source.

Oxygen

A chemical element with symbol O and atomic number 8, essential for most forms of life and a critical component of the Earth's atmosphere.

Water

A transparent, odorless, tasteless, and nearly colorless chemical substance that is the main constituent of Earth's streams, lakes, and oceans.

Transportation Cost

The expenses incurred in moving goods or individuals from one location to another, including fuel, labor, and maintenance.