An investment project is most likely to be accepted by the payback period rule and not accepted by the NPV rule if the project has:

Multiple Choice

• a very large negative cash flow at the termination of the project.

• The payback period rule and the NPV rule cannot be used to evaluate the same type of projects.

• a large initial investment with moderate positive cash flows over a very long period of time.

• most of the cash flow at the beginning of the project.

• All projects approved by the payback period rule will be accepted by the NPV rule.