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Project C Requires a Net Investment of $1,000,000 and Has

Question 32

Multiple Choice

Project C requires a net investment of $1,000,000 and has a payback period of 5.6 years.You analyze Project C and decide that Year 1 free cash flow is $100,000 too low,and Year 3 free cash flow is $100,000 too high.After making the necessary adjustments


A) the payback period for Project C will be longer than 5.6 years.
B) the payback period for Project C will be shorter than 5.6 years.
C) the IRR of Project C will increase.
D) the NPV of Project C will decrease.

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