A project has a discounted payback period that is equal to the required payback period. Given this, the project:
A) will not be acceptable under the payback rule.
B) must have a profitability index that is equal to or greater than 1.0.
C) must have a zero net present value.
D) must have an internal rate of return equal to the required return.
E) will still be acceptable if the discount rate is increased.

Question

A project has a discounted payback period that is equal to the required payback period. Given this, the project: 
A) will not be acceptable under the payback rule. 
B) must have a profitability index that is equal to or greater than 1.0. 
C) must have a zero net present value. 
D) must have an internal rate of return equal to the required return. 
E) will still be acceptable if the discount rate is increased.

Quizplus · Accepted Answer

The Answer is B

A Project Has a Discounted Payback Period That Is Equal