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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