All Else Equal,the Payback Period for a Project Will Decrease

question 98

Multiple Choice

All else equal,the payback period for a project will decrease whenever the:

• A)initial cost increases.
• B)required return for a project increases.
• C)assigned discount rate decreases.
• D)cash inflows are moved earlier in time.
• E)duration of a project is lengthened.

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Definitions:

Fixed Assets

Long-term tangible assets that are used in the operating activities of a business and are not expected to be consumed or converted into cash in the short term.

Equity Shares

Shares of stock that represent ownership in a company, entitling the shareholder to a portion of the corporation's profits and assets.

Rights Offering

A method by which a company raises additional capital by giving existing shareholders the right to purchase additional shares at a predetermined price, often at a discount to the market price.

Market Price

The current trading rate for services or assets in the market.