Which of the Following Is True for 5-Year Project with a 3-Year

question 3

Multiple Choice

Which of the following is true for 5-year project with a 3-year payback period?

• A)The net present value is negative.
• B)The net present value is zero.
• C)The net present value is positive.
• D)Not enough information to determine anything about the project's net present value.

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Definitions:

Liabilities

Financial obligations or debts a company owes to others, which must be settled over time through the transfer of assets, provision of services, or other economic benefits.

Dividends Distributed

The portion of a company's earnings paid out to shareholders.

Accounting Equation

The basic principle underlying accounting that asserts that Assets = Liabilities + Equity, illustrating the balance among what a company owns and owes at any point in time.

Asset Accounts

Accounts that record the resources owned or controlled by a company that have future economic value.