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

question 133

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 does not consider the time value of money.
• C) The payback period uses discounted cash-flow techniques.
• D) The payback period generally leads to the same decision as other investment selection methods.

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Definitions:

Equity Method

The Equity Method is an accounting approach used for recording investments in associate companies where the investor has significant influence, typically 20-50% ownership, by recognizing its share of the associate's profits or losses.

Dividend Revenue

Income received from owning shares of stock in a corporation that pays dividends.

Operating and Financial Affairs

The various activities related to managing a company's day-to-day operations and handling its financial resources.

Investee

A company or entity in which an investor holds a minority ownership stake or interest, but not controlling interest.