All else equal,the payback period for a project will decrease whenever the
A)duration of a project is lengthened.
B)cash inflows are moved earlier in time.
C)assigned discount rate decreases.
D)required return for a project increases.
E)initial cost increases.

Question

Quizplus · Accepted Answer

Moving cash inflows earlier in time will decrease the payback period for a project. This is because the payback period measures the time it takes for the project's initial cost to be recovered through cash inflows. By bringing in cash inflows earlier, the payback period will be shorter. The other options listed will increase the payback period, making them incorrect.

All Else Equal,the Payback Period for a Project Will Decrease