Which of the Following Statements About the "Payback Period" Is

question 131

Multiple Choice

Which of the following statements about the "payback period" is true?

• A) The payback period considers cash flows after the payback has been reached.
• B) The payback period considers the time value of money.
• C) The payback period uses discounted cash-flow techniques.
• D) The payback period fails to produce an objective decision to accept or reject an individual project.

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Definitions:

Monetary Policy

Actions by a central bank or other regulatory authority to influence a nation's money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.

Fiscal Policy

Government policies related to taxation and public spending with the aim of influencing economic conditions, including growth, inflation, and unemployment rates.

Legislation

Laws and statutes that are enacted by a legislative body through its legislative process.

Marginal Propensity

The portion of additional income that an individual spends on consuming goods and services, as opposed to saving.