{"id":8611,"date":"2024-04-15T03:03:25","date_gmt":"2024-04-15T03:03:25","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=8611"},"modified":"2024-04-15T03:03:25","modified_gmt":"2024-04-15T03:03:25","slug":"which-one-of-the-following-statements-is-correct-a-the-number-of-years-required-to-recover-the-initial-cash-investment-in-a-project-is-called-pay-back-period-pbp-b-the-discount-rate-that-equates","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-is-correct-a-the-number-of-years-required-to-recover-the-initial-cash-investment-in-a-project-is-called-pay-back-period-pbp-b-the-discount-rate-that-equates\/","title":{"rendered":"Which one of the following statements is correct? A. The number of years required to recover the initial cash investment in a project, is called Pay Back period (PBP) B. The discount rate that equates the present value of the expected Net Cash Flows (CFs) with the Initial Cash Outflow (ICO) is known as internal rate of return C. The present value of the proposal&#8217;s net cash flows, less the proposal&#8217;s initial cash outflow is known as the Net Present Value (NPV) D. All of these"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9dac8230904\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    The number of years required to recover the initial cash investment in a project, is called Pay Back period (PBP)                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    The discount rate that equates the present value of the expected Net Cash Flows (CFs) with the Initial Cash Outflow (ICO) is known as internal rate of return                <\/div>\r\n                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"true\">\r\n                    All of these                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is D. All of these.<\/p>\n<p>Payback period is the number of years required to recover the initial cash investment in a project. It is calculated by dividing the initial investment by the annual net cash flow.<\/p>\n<p>Internal rate of return (IRR) is the discount rate that equates the present value of the expected net cash flows (CFs) with the initial cash outflow (ICO). It is calculated by solving the following equation:<\/p>\n<p>$$\\sum_{t=0}^{n} CF_t \/ (1+r)^t = ICO$$<\/p>\n<p>Net present value (NPV) is the present value of the proposal&#8217;s net cash flows, less the proposal&#8217;s initial cash outflow. It is calculated by using the following formula:<\/p>\n<p>$$NPV = \\sum_{t=0}^{n} CF_t \/ (1+r)^t &#8211; ICO$$<\/p>\n<p>A project is considered to be financially feasible if its NPV is positive, IRR is greater than the required rate of return, and payback period is within an acceptable range.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[656],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Which one of the following statements is correct? A. The number of years required to recover the initial cash investment in a project, is called Pay Back period (PBP) B. The discount rate that equates the present value of the expected Net Cash Flows (CFs) with the Initial Cash Outflow (ICO) is known as internal rate of return C. The present value of the proposal&#039;s net cash flows, less the proposal&#039;s initial cash outflow is known as the Net Present Value (NPV) D. All of these<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-is-correct-a-the-number-of-years-required-to-recover-the-initial-cash-investment-in-a-project-is-called-pay-back-period-pbp-b-the-discount-rate-that-equates\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Which one of the following statements is correct? A. 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A. The number of years required to recover the initial cash investment in a project, is called Pay Back period (PBP) B. The discount rate that equates the present value of the expected Net Cash Flows (CFs) with the Initial Cash Outflow (ICO) is known as internal rate of return C. The present value of the proposal's net cash flows, less the proposal's initial cash outflow is known as the Net Present Value (NPV) D. All of these","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-is-correct-a-the-number-of-years-required-to-recover-the-initial-cash-investment-in-a-project-is-called-pay-back-period-pbp-b-the-discount-rate-that-equates\/","og_locale":"en_US","og_type":"article","og_title":"Which one of the following statements is correct? A. 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