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Which of the Following Statements Is True of a Project

Question 58

Multiple Choice

Which of the following statements is true of a project whose cash flows accrue relatively rapidly?


A) The payback period is longer than the years expected to recover the original investment.
B) The net present value is not very sensitive to changes in the discount rate.
C) The required rate of return is revised throughout the duration of the project.
D) The net present value of the project is always negative if cash flows accrue rapidly.
E) The project will have multiple internal rates of return due to rapidly accruing cash flows.

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