As the firm's cost of capital increases, the payback period of a project decreases. T or FPlease help me with a true or false question?
Depends on the expexted net return over the next few years. If the investment is very expensive but will make a huge difference in priductivity/efficiency/whatever then it will have a short payback period but if its a very small investment it may not make much of a difference to the firm so the payback period would be longer.
If this is a simple T or F question though, I guess I'd say its false because generally if it costs more, it'll take longer to recoup your losses.Please help me with a true or false question?
False
t
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