Refer to the table below,which shows the results of payback,net present value,and internal rate of return analysis of four projects.Which is preferred by the payback criterion?
A) Project A
B) Project B
C) Project C
D) Project D

Question

Refer to the table below,which shows the results of payback,net present value,and internal rate of return analysis of four projects.Which is preferred by the payback criterion? 
A) Project A 
B) Project B 
C) Project C 
D) Project D

Quizplus · Accepted Answer

Project A has the shortest payback period of 2 years, which is preferred by the payback criterion. However, Project A has a negative net present value and a lower internal rate of return compared to other projects. Therefore, if the decision is solely based on payback period, Project A is the preferred choice. However, if other criteria such as profitability and risk are considered, a different project might be preferred.

Refer to the Table Below,which Shows the Results of Payback,net