A project has a discounted payback period that is equal to the required payback period. Given this information, the project:   Multiple Choice   will still be acceptable if the discount rate is increased.   must have a zero net present value.   must have a profitability index that is equal to or greater than 1.0.   must have an internal rate of return equal to the required return.   will not be acceptable under the payback rule.

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter12: Capital Investment Decisions
Section: Chapter Questions
Problem 16MCQ: Using IRR, a project is rejected if the IRR a. is equal to the required rate of return. b. is less...
Question

 

A project has a discounted payback period that is equal to the required payback period. Given this information, the project:

 

Multiple Choice
  •  

    will still be acceptable if the discount rate is increased.

  •  

    must have a zero net present value.

  •  

    must have a profitability index that is equal to or greater than 1.0.

  •  

    must have an internal rate of return equal to the required return.

  •  

    will not be acceptable under the payback rule.

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