Based on the payback rule, which of the following is false?
A) With a payback cutoff of 1.5 years, both projects are unacceptable.
B) With a payback cutoff of three years, both projects are acceptable.
C) With a payback cutoff of one year, neither project is acceptable.
D) Since both projects pay back, the NPV of both must be positive.
E) You would be indifferent between the two projects.

Question

Based on the payback rule, which of the following is false?
A) With a payback cutoff of 1.5 years, both projects are unacceptable. 
B) With a payback cutoff of three years, both projects are acceptable. 
C) With a payback cutoff of one year, neither project is acceptable. 
D) Since both projects pay back, the NPV of both must be positive. 
E) You would be indifferent between the two projects.

Quizplus · Accepted Answer

The Answer of  Based on the payback rule, which of the following is false?
A) With a payback cutoff of 1.5 years, both projects are unacceptable. 
B) With a payback cutoff of three years, both projects are acceptable. 
C) With a payback cutoff of one year, neither project is acceptable. 
D) Since both projects pay back, the NPV of both must be positive. 
E) You would be indifferent between the two projects.

Based on the Payback Rule, Which of the Following Is