corp: reading 29, page 42: payback criteria

what does payback criteria mean for a project? Thanks.

do you have more info? I may mean the hurdle rate??

sorry, it is in page 84, question 42 refer to one statement in the case: "Will projects that meet a corporation’s payback criterion for acceptance necessarily have a positive net present value(NPV)? " Thanks. Thecodont Wrote: ------------------------------------------------------- > do you have more info? I may mean the hurdle > rate??

I think they mean the hurdle rate. I did not read the question but would think that the answer would be no because you could have a hurdle rate below your WACC. Lets say your required IRR is 9% and your WACC is 10% using IRR you will accept projects that earn 9% however if you discount those cash flows using WACC you will have a negative NPV Just my logic though