An Investment Project That Requires a Present Investment of $210,000

question 155

Multiple Choice

An investment project that requires a present investment of $210,000 will have cash inflows of R dollars each year for the next five years.The project will terminate in five years.Consider the following statements (ignore income tax considerations) :
I.If R is less than $42,000,the payback period exceeds the life of the project.
II.If R is greater than $42,000,the payback period exceeds the life of the project.
III.If R equals $42,000,the payback period equals the life of the project.
Which statement(s) is(are) true?

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

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Definitions:

Incorporation by Reference

A method where a document includes by reference all or portions of another document, making the referenced material part of the new document.

Extrinsic Documents

Documents that are not part of the original contract but are referenced and incorporated by implication or necessity.

Specification of Heirs

is the process or legal document in which a person designates who will inherit their assets after death.

Nuncupative Will

An orally delivered will, often made in anticipation of imminent death, and usually requiring witnesses, with legal recognition varying by jurisdiction.