Use the following mutually exclusive investment cash flows for the question(s) below: Based on the payback criterion, which of the following is NOT true?
A) With a payback cutoff of 2.5 years, both projects are acceptable.
B) With a payback cutoff of three years, both projects are acceptable.
C) With a payback cutoff of 1.5 years, neither project is acceptable.
D) With a payback cutoff of 1.75 years, only Project A is acceptable.
E) If you choose the project that pays back the fastest, Project A is preferred.

Question

Use the following mutually exclusive investment cash flows for the question(s) below:  Based on the payback criterion, which of the following is NOT true?
A) With a payback cutoff of 2.5 years, both projects are acceptable. 
B) With a payback cutoff of three years, both projects are acceptable. 
C) With a payback cutoff of 1.5 years, neither project is acceptable. 
D) With a payback cutoff of 1.75 years, only Project A is acceptable. 
E) If you choose the project that pays back the fastest, Project A is preferred.

Quizplus · Accepted Answer

The Answer of Use the following mutually exclusive investment cash flows for the question(s) below:  Based on the payback criterion, which of the following is NOT true?
A) With a payback cutoff of 2.5 years, both projects are acceptable. 
B) With a payback cutoff of three years, both projects are acceptable. 
C) With a payback cutoff of 1.5 years, neither project is acceptable. 
D) With a payback cutoff of 1.75 years, only Project A is acceptable. 
E) If you choose the project that pays back the fastest, Project A is preferred.

Use the Following Mutually Exclusive Investment Cash Flows for the Question(s)