The discounted payback period of a project will be:
A)The same as the project's payback period
B)Greater than the project's payback period
C)Less than the project's payback period
D)Always less than the company's maximum acceptable payback period

Question

Quizplus · Accepted Answer

The discounted payback period takes into account the time value of money by discounting the expected cash flows. Therefore, it will be greater than the project's payback period, which does not consider the time value of money. The discounted payback period can be longer or shorter than the company's maximum acceptable payback period, depending on the specifics of the project and the company's criteria.

The Discounted Payback Period of a Project Will Be