$11$

Multiple Choice

$1$ point

All else equal, the payback period for a project will decrease whenever the:

assigned discount rate decreases.

required return for a project increases.

cash inflows are moved earlier in time.

$2$

$3$

$$

duration of a project is lengthened.

initial cost increases.

$12$

Numeric $1$ point

$5$

What is the exact payback period for this project below, rounded to two decimal places:

$6$

Year$0$

Year $1$

Year $2$

Year $3$

Year $4$

Year $5$

Project $x$

$-$$$7,000$

$$2,500$

$$2,500$

$$1,000$

$$1,500$

$$2,500$

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