If the payback period for a project exceeds the firm's threshold period, then the project is accepted.

Question

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If the payback period for a project exceeds the firm's threshold period, then the project is not accepted. The payback period is the time it takes for a project to generate enough cash flows to recover the initial investment. The threshold period is the maximum acceptable payback period set by the firm. If the payback period exceeds this threshold, it means the project is not generating enough cash flows to recover the initial investment within the acceptable time frame, and is therefore not considered viable.

If the Payback Period for a Project Exceeds the Firm's