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Which of the Following Statements Is True of a Project

Question 63

Multiple Choice

Which of the following statements is true of a project with a long payback period?


A) A long payback period increases the project's risk.
B) A long payback period ensures enough liquidity for the firm.
C) A long payback period ensures positive net present value of the project.
D) A long payback period results in the expected rate of return being more than the internal rate of return.
E) A long payback period results in the terminal value of the project being higher than the present value of its cash outflows.

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