1-The cash payback technique is a quick way to calculate a project\'s net presen

Question

1-The cash payback technique is a quick way to calculate a project's net present value.(True or False)
2-The cost of capital is a weighted average of the rates paid on borrowed funds, as well as on funds provided by investors in the company's stock.(True or False)
3-The profitability index allows comparison of the relative desirability of projects that require differing initial investments.(True or False)
4-Using the internal rate of return method, a project is rejected when the rate of return is greater than or equal to the required rate of return.(True or False)
5-A major advantage of the annual rate of return method is that it considers the time value of money.(True or False)

Explanation / Answer

1)

Cash payback period is quick way of calculating simple payback period. Net present value considers the present value of cash flows not simple cash flows.

Hence, given statement is False.

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