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Which of the following statements abot investment decision

Which of the following statements about investment decision models is true?

a) the discounted payback rate takes into account cash flows for all periods.

b) the payback rule ignores all cash flows after the end of the payback period.

c) the net present value model says to accept investment opportunities when their rates of return exceed the company's incremental borrowing rate.

d) the internal rate of return rule is to accept the investment if the opportunity cost of capital is greater than the internal rate of return.

Solution Summary

Which of the following statements about investment decision models is true?

a) the discounted payback rate takes into account cash flows for all periods.

b) the payback rule ignores all cash flows after the end of the payback period.

c) the net present value model says to accept investment opportunities when their rates of return exceed the company's incremental borrowing rate.

d) the internal rate of return rule is to accept the investment if the opportunity cost of capital is greater than the internal rate of return.

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