Question
Which of the following statements is true? A. The payback period increases as the cost of capital decreases. B. The simple rate of return will
Which of the following statements is true?
A. The payback period increases as the cost of capital decreases.
B. The simple rate of return will be the same for two alternatives that have identical cash flow patterns even if the pattern of accounting net operating income differs between alternatives.
C. The initial rate of return will be higher than the cost of capital for projects that have positive net present values.
D. If two alternatives have the same present value of cash inflows, the alternative that requires the higher investment will have the higher project profitability index.
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