An Investment Has a Payback Period of 5 Years and a Useful

question 78

Multiple Choice

An investment has a payback period of 5 years and a useful life of 10 years. If all other variables are held constant, which of the following changes would reduce the payback period?

• A) An increase in the investment's cost
• B) An increase in the investment's useful life
• C) An increase in the cash inflows in years 1 and 2
• D) An increase in the cash inflows in years 9 and 10
• E) None of above