The payback period of a project is defined as:
A) the number of years required for cumulative profits from a project to equal the initial outlay.
B) the number of years required for the cumulative cash flows from a project to equal the initial outlay.
C) the number of years required for the cumulative cash flows from a project to equal the average investment in the project.
D) a period of time sufficient to earn a rate of return equal to the firm's cost of capital.
Correct Answer:
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Q1: Rank order the following capital project types
Q3: Capital projects are said to be mutually
Q4: When the NPV and IRR rules produce
Q5: The internal rate of return is the
Q6: Which of the following best describes the
Q7: Incremental cash flows associated with capital budgeting
Q8: The first step in the capital budgeting
Q9: Although quick and easy to apply, the
Q10: Which of the following is most correct?
A)A
Q11: If a project's NPV is negative:
A)the project
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