22. A project has a required payback period of three years. Which one of the following statements is correct concerning the payback analysis of this project? A. The cash flows in each of the three years must exceed one-third of the project's initial cost if the project is to be accepted.B. The cash flow in year three is ignored.C. The project's cash flow in year three is discounted by a factor of (1 + R)3.D.The cash flow in year two is valued just as highly as the cash flow in year one.E. The project is acceptable whenever the payback period exceeds three years.Refer to section 9.2AACSB: N/ABloom's: ComprehensionDifficulty: BasicLearning Objective: 9-2Section: 9.2Topic: Payback9-57

Chapter 09 - Net Present Value and Other Investment Criteria23. A project has a discounted payback period that is equal to the required payback period. Given this, which of the following statements must be true?I. The project must also be acceptable under the payback rule.II. The project must have a profitability index that is equal to or greater than 1.0.III. The project must have a zero net present value.IV. The project's internal rate of return must equal the required return. Refer to section 9.3AACSB: N/ABloom's: AnalysisDifficulty: IntermediateLearning Objective: 9-3Section: 9.3Topic: Discounted payback24. Which one of the following statements related to payback and discounted payback is correct? Refer to sections 9.2 and 9.3AACSB: N/ABloom's: ComprehensionDifficulty: BasicLearning Objective: 9-2 and 9-3Section: 9.2 and 9.3Topic: Payback and discounted payback9-58

Chapter 09 - Net Present Value and Other Investment Criteria25. Applying the discounted payback decision rule to all projects may cause: Refer to section 9.3AACSB: N/ABloom's: ComprehensionDifficulty: BasicLearning Objective: 9-3Section: 9.3Topic: Discounted payback

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