Item$1$

Time Remaining $13$ minutes $7$ seconds

$00$:$13$:$07$

Item $1$

Time Remaining $13$ minutes $7$ seconds

$00$:$13$:$07$

A firm is considering a project that has an NPV of $$18,500,$ an IRR of $13\mathrm{.}2$ percent, and a payback period of $3\mathrm{.}2$ years. The required return is $12\mathrm{.}8$ percent and the required payback period is $3\mathrm{.}0$ years. Which one of the following statements correctly applies to this project?

Multiple Choice

The payback rule will automatically be ignored since both the net present value and the internal rate of return indicate an accept decision.

Payback indicates acceptance.

The payback decision rule could override the accept decision indicated by the net present value if liquidity is a primary concern.

The net present value indicates accept while the internal rate of return indicates reject.

The net present value decision rule is the only rule that matters when making the final decision.