[amp_mcq option1=”shorter payback period” option2=”greater payback period” option3=”less project return” option4=”greater project return” correct=”option2″]
The correct answer is B. greater payback period.
Project liquidity is a measure of how quickly a project can be converted into cash. A project with a longer payback period will have lower liquidity, because it will take longer to recoup the initial investment.
Option A is incorrect because a shorter payback period indicates that the project will be converted into cash more quickly, which would increase liquidity.
Option C is incorrect because a lower project return indicates that the project will generate less cash, which would decrease liquidity.
Option D is incorrect because a greater project return indicates that the project will generate more cash, which would increase liquidity.