Other factors held constant, greater project liquidity is because of___________?
Correct answer: C. Shorter payback period
- A. Less project returns
- B. Greater project return
- C. Shorter payback period
- D. Greater payback period
Explanation
A shorter payback period generally indicates greater liquidity because the investment is recovered sooner, holding other factors constant. A longer payback delays recovery and reduces liquidity.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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