Question

Between projects A and B, project A will be considered a superior financial undertaking if it has:

a. A shorter payback period than project B.

b. A lower net present value than project B.

c. A lower average rate of return than project B.

d. A longer payback period than project B.

Answer 1

A. a shorter payback period than project B.

Step-by-step explanation:

Payback period is the period when the investment value is fully recovered through the business.

Hence the shorter the payback period, the better it is because this means that the return on investment in earned at a greater pace.

Hope this clear things up.

Good luck.