?Which of the following statements is true of a project with a long payback period?
A. ?A long payback period increases the project's risk.
B. ?A long payback period ensures enough liquidity for the firm.
C. ?A long payback period ensures positive net present value of the project.
D. ?A long payback period results in the expected rate of return being more than the internal rate of return.
E. ?A long payback period results in the terminal value of the project being higher than the present value of its cash outflows.
Answer: A
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