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NEW QUESTION: 1
Refer to the exhibit.

The management accountant has completed the appraisal of a project which is forecast to generate the following cash flows.
It has now been discovered that the cash inflow in year 3 has been overestimated.
What will be the effect on the calculated net present value (NPV) and the payback period?
A. NPV decrease; payback period stay the same
B. NPV decrease; payback period decrease
C. NPV increase; payback period increase
D. NPV decrease; payback period increase
Answer: A