Which of the following statements is / are TRUE about the payback period method of investment appraisal? (i) It uses discounted profits (ii) It may result in a project with a negative NPV being accepted (iii) It looks at the whole life of the project (iv) It favours lower risk projects (on the basis that risk is time related) a (i) and (iii) b (i) and (iv) c (ii) and (iv) d (ii) and (iii)
Which of the following statements is / are TRUE about the payback period method of investment appraisal? (i) It uses discounted profits (ii) It may result in a project with a negative NPV being accepted (iii) It looks at the whole life of the project (iv) It favours lower risk projects (on the basis that risk is time related) a (i) and (iii) b (i) and (iv) c (ii) and (iv) d (ii) and (iii)
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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6. Which of the following statements is / are TRUE about the payback period method of investment appraisal?
(i) It uses discounted profits
(ii) It may result in a project with a negative
(iii) It looks at the whole life of the project
(iv) It favours lower risk projects (on the basis that risk is time related)
| a |
(i) and (iii) |
|
| b |
(i) and (iv) |
|
| c |
(ii) and (iv) |
|
| d |
(ii) and (iii) |
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