Suppose You Have a Project Whose Discounted Payback Is Equal

question 13

Multiple Choice

Suppose you have a project whose discounted payback is equal to its termination date. What can you say for sure about its PI?

• A) The discounted payback will be greater than zero.
• B) It will have a PI and NPV of zero.
• C) The NPV and IRR will yield the same decision.
• D) The IRR will just equal the cost of capital.

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Definitions:

Adaptive Radiation

The rapid evolution of diversely adapted species from a common ancestor when introduced into new environmental circumstances.

Balanced Polymorphism

A situation in genetics where two or more alleles of a gene persist in a population because they each offer a survival advantage.

Sister Groups

Groups of organisms that share an immediate common ancestor, and therefore are each other's closest relatives.

Phenotype

An individual’s observable traits.