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Which one of the following statements is correct (true)? When a company is...

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Finance

Which one of the following statements is correct (true)?

  • When a company is cash rich, a project with a short payback period but a low rate of return may be preferred to a project with a long payback period and a high rate of return.

  • The required rate of return is the maximum rate of return that an investment project must yield to the acceptable.

  • In preference decisions, the profitability index and internal rate of return methods may rank projects in a different order of preference.

  • The minimum required rate of return is the discount rate that makes the net present value of the project equal to zero.

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