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:

Education And Intelligence

The interplay between the acquisition of formal knowledge, skills through schooling, and the innate or developed ability to understand, reason, and solve problems.

Psychological Reactance

A psychological response which occurs when individuals perceive their freedoms or choices are being limited, prompting them to reclaim or reassert lost freedoms.

Individualistic Cultures

Cultures that emphasize personal achievements and rights, prioritizing individual goals over group goals.

Reactance

A psychological reaction that occurs when individuals feel their freedom to choose or act is being restricted, leading them to resist the restriction or do the opposite of what is being sought.