The Discounted Payback Period of a Project Will Decrease Whenever

question 61

Multiple Choice

The discounted payback period of a project will decrease whenever the:

• A)discount rate applied to the project is increased.
• B)initial cash outlay of the project is increased.
• C)time period of the project is increased.
• D)amount of each project cash inflow is increased.
• E)costs of the fixed assets utilized in the project increase.

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Definitions:

Fair-Value Method

An accounting approach where assets and liabilities are listed at their fair value, reflecting their current market price.

Majority-Owned Investment

An investment in which the parent company owns more than 50% of the subsidiary's voting stock.

Initial Value Method

An accounting method that records assets and investments at their original cost without adjusting for increases or decreases in market value.

Partial Equity Method

A method of accounting for an investment where the investor recognizes income to the extent of dividends received and any changes in the investee's equity.