Firms May Select Projects with Short Paybacks Because

question 34

Multiple Choice

Firms may select projects with short paybacks because

• A)projects with longer paybacks may be riskier.
• B)shorter paybacks may help reduce liquidity problems.
• C)if the risk of obsolescence is high, the firm may want to recover the funds rapidly.
• D)All of the above are correct.

Understand the characteristics and conditions under which a hypergeometric probability distribution is used.

Calculate probabilities using the hypergeometric formula.

Apply the concept of sampling with or without replacement in probability calculations.

Contrast the hypergeometric, binomial, and Poisson distributions.

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Definitions:

Substantially All

A term used in legal and finance contexts to indicate a majority or near-total portion of an asset, company's assets, or activity.

Approved

Officially accepted or sanctioned by an authoritative body, indicating compliance with specified requirements or standards.

Shareholders

Shareholders are individuals or entities that own one or more shares of stock in a corporation, making them partial owners of the company.

Model Nonprofit Corporation Act (MNCA)

A legal framework designed to guide the formation, operation, and governance of nonprofit organizations in the United States.