The investment timing problem arises when:
A) cash flows may occur at the beginning or end of each time period.
B) there is a choice between using the payback or NPV rules.
C) the project has a positive initial cash flow.
D) investment can occur now or at some future point.

Question

Quizplus · Accepted Answer

The investment timing problem refers to the decision of whether to invest now or defer investment to a later time. Therefore, the best choice for this problem is option D, which specifically addresses this issue. The other options are not relevant to the investment timing problem.

The Investment Timing Problem Arises When