Question 2:

You are considering a project with regular cash flows, an IRR of 11.63 percent, a NPV of $987, and a payback period of 2.98 years. Which one of the following statements is correct given this information?

(Please mark the best answer and explain your answer.)

The discounted payback period must be less than 2.98 years.

The break-even discount rate must be less than 11.63 percent.

The discount rate used in computing the net present value was less than 11.63 percent.

Both A and C.

None of the above.