A Project Has a Payback Period of 5 Years and the Firm

Multiple Choice

A project has a payback period of 5 years and the firm employs a 10% cost of capital.Which of the following statements is correct concerning this project's discounted payback?

A) Discounted payback will exceed 5 years.
B) Discounted payback will be less than 5 years.
C) Discounted payback will decrease if the project's IRR exceeds 10%.
D) Discounted payback will increase if the project's IRR is less than 10%.