Everything else equal, a project that has a long traditional payback period (PB) _____.
A. has greater implied risk than a project that has a shorter PB
B. generally ensures the firm has enough liquidity to survive for a fairly long period of time
C. must have a positive net present value (NPV)
D. has an expected rate of return that is greater its internal rate of return
E. results in a terminal value that is greater than the present value of its cash outflows
Answer: A
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