Union Atlantic Corporation, which has a required rate of return equal to 14 percent, is evaluating a capital budgeting project that requires an initial investment of $170,000. The project will generate a $60,750 cash inflow at the year-end of each of the next four years. According to this information, which of the following statements is correct? Group of answer choices The project's is acceptable if its discounted payback period is less than the traditional payback period. The project is acceptable because its net present value is negative. The project is acceptable if its internal rate of return (IRR) is more than 14 percent. The project is acceptable if its discounted payback period is greater than its economic life.
Union Atlantic Corporation, which has a required rate of return equal to 14 percent, is evaluating a capital budgeting project that requires an initial investment of $170,000. The project will generate a $60,750 cash inflow at the year-end of each of the next four years. According to this information, which of the following statements is correct? Group of answer choices The project's is acceptable if its discounted payback period is less than the traditional payback period. The project is acceptable because its net present value is negative. The project is acceptable if its internal rate of return (IRR) is more than 14 percent. The project is acceptable if its discounted payback period is greater than its economic life.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Union Atlantic Corporation, which has a required
Group of answer choices
The project's is acceptable if its discounted payback period is less than the traditional payback period.
The project is acceptable because its net present value is negative.
The project is acceptable if its internal rate of return (IRR) is more than 14 percent.
The project is acceptable if its discounted payback period is greater than its economic life.
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