The payback period is:A) The time it takes for a project to be profitableB) The time required to recover the initial investmentC) The total time a project lastsD) The period during which a project generates revenue

The payback period is:A) The time it takes for a project to be profitableB) The time required to recover the initial investmentC) The total time a project lastsD) The period during which a project generates revenue

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 3DQ

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Question

The payback period is:
A) The time it takes for a project to be profitable
B) The time required to recover the initial investment
C) The total time a project lasts
D) The period during which a project generates revenue

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This refers to the sum of project’s first cost and the present worth of all costs for replacement, operation and maintenance for a long time or forever. a. Rate of return on additional investment b. Annual cost c. Capitalized cost d. Present worth cost
Illustrate the conventional payback period, annual project cash flow over the life of project, and cumulative project cash flow over time?
How can the money released from a project be reinvested to yield a rate of return equal to that received from the project?
The net present value (NPV) of a project is:A) The difference between total cash inflows and total cash outflows over the project’s lifeB) The sum of discounted cash flows, less the initial investmentC) The discount rate at which the project’s NPV is zeroD) The payback period for recovering the initial investment explain.
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