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the payback period > the discounted payback period for the same project if the same project...

the payback period > the discounted payback period for the same project if the same project if r>0

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Answer #1

The above statement is False.

The payback period is calculate by Dividing the Initial Cash outflow by Annual Cash Flow

So, Cash Inflow in the Payback period are more than the Cash flows in Discounted Paybeck Periods as these Cash Flows are not discounted in Nornal Payback Period. So if Cash Inflows are high in Nomral Payback are high, this will make the Payback Period high for Normal Payback Period and less for Discounted Payback Period.

So.

the payback period < the discounted payback period for the same project if the same project if r>0

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