Question

If a project's discounted payback period is less than its useful life, _____.

a. the terminal value of its future cash inflows is less than the future value of its initial cost

b. the present value of its future cash inflows is greater that the future value of its initial cost

c. the present value of its future cash flows exceeds its initial cost

d. its future cash inflows are less than its initial cost

e. its cost-recovery time should exceed the maximum cost-recovery time established by the firm

Answer 1

Answer:

e. Its cost-recovery time should exceed the maximum cost-recovery time established by the firm

Explanation:

If a project's discounted payback period is less than its useful life, its cost-recovery time should exceed the maximum cost-recovery time established by the firm.