The Following Are Disadvantages of Using the Payback Rule Except

question 31

Multiple Choice

The following are disadvantages of using the payback rule except the rule

• A)ignores all cash flow after the cut-off date.
• B)does not use the time value of money.
• C)is easy to calculate and use.
• D)does not have the value additivity property.

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Definitions:

Expenses

Expenses refer to the outflows or consumption of assets or incurrence of liabilities during an accounting period, stemming from activities that drive revenue.

Income

Earnings obtained from work, investments, or business operations, reflecting the financial gain.

Net Income

Net Income is the total earnings or profit of a company after subtracting all expenses from revenue, indicating the financial performance over a specific period.

Income Statement

A financial statement that shows a company's revenues, expenses, and profitability over a specific accounting period.