Statement about payback period analysis

Assignment Help Financial Management

Reference no: EM13948624

Which of the following statement about payback period analysis is NOT correct?

a) Payback period is defined as the number of years necessary for cash flows to recover the original investment. b) Both conventional payback and discounted payback ignore all cash flows that occur after the payback period. c) The more the payback, the more liquid the project. d) The discounted payback solves the conventional payback's problem of not considering the project's cost of capital in the payback calculation.

Reference no: EM13948624

Questions Cloud

Analysis of annual distribution policy-impact on firm value : Melanee is a financial analyst in Bidget Corp. As part of her analysis of the annual distribution policy and its impact on the firm’s value, she makes the following calculations and observations: The company generated a free cash flow of $120 million..

Summarize the findings of north carolina : Review The Nature and Scope of Hispanic/Latino Gangs in North Carolina by Douglas L. Yearwood and Alison Rhyne, North Carolina Governor's Crime Commission, North Carolina Criminal Justice Analysis Center. Summarize the findings of North Carolina

Calculate this bonds modified duration : You have an 8 percent, $1,000 par bond that matures in 3 years. If the bond’s yield to maturity is 10 percent, Calculate this bond’s modified duration. Suppose the YTM goes down from 10 percent to 9.5 percent, calculate an estimate of the price chang..

External sources of funding favor a high or low payout ratio : Does Taxes on capital gains are deferred until the capital gain is realized, but taxes on dividends are due in the year in which they are received favor a high or low payout ratio? Does A firm has an established credit line for access to external sou..

Statement about payback period analysis : Which of the following statement about payback period analysis is NOT correct?

Understanding of constraints on dividend payments : Based on your understanding of constraints on dividend payments, identify the type of constraint this condition represents. Assume that all other factors held constant. Out of the following 3 factors, identify which factors tend to favor high or low ..

Current ratio can be obtained solely from the balance sheet : Current ratio can be obtained solely from the balance sheet. Total profit margin, or just called total margin, can be obtained solely from the income statement. Average collection period is used to evaluate account receivable performance. A smaller n..

Compute the IRR on the cash flow streams : Compute the IRR on the following cash flow streams: An initial investment of $22,986 followed by a single cash flow of $34,690 in year 6. An initial investment of $2,175,412 followed by cash flows of $1,774,000 and $1,140,700 in years 2 and 4, respec..

Why many people tell new converts to begin by reading john : How is this so? What is in the Gospel of John that would cause a Jewish scholar to say this? If it is true, why do many people tell new converts to begin by reading John

User Account

All Pages