Which of the following statements is accurate?
A) A project that just breaks even on an accounting basis will not pay back.
B) A project that just breaks even on an accounting basis will have a positive rate of return.
C) A project cannot earn a positive return unless its payback period is longer than the project life.
D) If the net income from a project is zero, then the project will have a discounted payback that is equal to its regular payback.
E) The relation between project life and payback period alone cannot tell you whether a project has a positive or negative NPV.

Question

Quizplus · Accepted Answer

The relation between project life and payback period does not provide direct information about the Net Present Value (NPV) of a project. NPV is calculated based on the present value of cash inflows and outflows over the project's life, and a project can have a positive NPV even if its payback period is longer than its life, or vice versa.

Which of the Following Statements Is Accurate