Negative future outflows the discounted payback period

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1. For a project with no negative future outflows the discounted payback period cannot be shorter than the accounting (non-discounted) payback period.

2. Assume Rodriquez Inc. has a 5-year maturity non-convertible zero coupon bond. If interest rates fall by 1% we would expect that this bond price would rise by about 5%.

3. Assume Rodriquez Inc. has a 5-year maturity convertible zero coupon bond. If interest rates fall by 1% we would expect that this bond price would rise by about 5%.

Reference no: EM13911768

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