Question
If you know a project has NPV=$100M and there is no uncertainty in the cash flow estimates, why should you still look at the project's
If you know a project has NPV=$100M and there is no uncertainty in the cash flow estimates, why should you still look at the project's payback period?
a) Because firms prefer to receive capital fast so that they can reduce their reliance on (costly) external capital b) Because firms prefer to receive capital fast so that cash flows are discounted for a relatively short period c) Because firms prefer not to receive capital fast so that they can benefit from the NPV>0 over a long period d) Because firms prefer not to receive capital fast so that they can raise more capital in financial markets e) You should not. Once you know that NPV>0, payback period is irrelevant
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