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A corporate CFO insists on making decisions using a payback period decision rule, pursuing all projects that pay back within five years. Which of the
A corporate CFO insists on making decisions using a payback period decision rule, pursuing all projects that pay back within five years. Which of the following are valid financial reasons for firing the CFO? Select all the correct responses. O a. The payback period after the negative cash flow from the old CFO's severance package combined with the positive net cash flow from a lower compensation package for the new CFO is less than five years. O b. While the new CFO demands higher compensation than the old one, the new CFO makes better project funding decisions. The overall NPV of these two effects is positive. O c. The new CFO has a better understanding of accounting and is able to maximise the bottom line on the firm's income statement. O d. The new CFO is a well-known Redditer on /r/Wall StreetBets who assures you that the stock will go "to the moon" and "tendies" will be acquired by all. When you challenge his assertion that market prices no longer need to reflect underlying business fundamentals, he replies with "strange justifications" you have never heard before like "Apes Together Strong" if they "hold the line" with their "diamond hands". O e. The new CFO is better at maximising cash flows, although doing so often comes with tremendous risk
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