Question: The Troomp project has all positive cash flows for all 7 years of its life. Its discounted pay-back period is 5.5 years, and undiscounted pay-back
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The Troomp project has all positive cash flows for all 7 years of its life. Its discounted pay-back period is 5.5 years, and undiscounted pay-back period is 5 years.
If the payment on the seventh year (the last year) of the project increases from $100 to $200,then
I. The discounted pay back period will be shorter than 5.5 years.
II. The ordinary (undiscounted) pay-back period will be longer than 5 years.
None of the above
II only
I and I
I only
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