Question: Select all the correct answers Question 4 options: A) One weakness of the regular payback method is that it ignores what happens after the initial
Select all the correct answers
Question 4 options:
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| A) | One weakness of the regular payback method is that it ignores what happens after the initial cost is recovered. The discounted payback method resolves this issue |
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| B) | The crossover rate is the cost of capital in which two projects have the same NPV |
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| C) | If the crossover rate is 15% and at a WACC of 10% project A has higher NPV than project B, at a WACC of 20% project A will have a lower NPV of project B |
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| D) | A firm has a WACC of 15%. A project requires an initial cash flow of $5,000, then it will pay $1,000 for 10 years. The discounted payback of this project is smaller than its regular payback |
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