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:

Redistributes Income

The process by which government policies, taxation, and public spending aim to adjust the allocation of income across a society.

Efficiency

describes the extent to which resources are allocated in a way that maximizes the output or outcome, often considering waste minimization and optimal allocation in economic contexts.

Equality

A condition of parity, particularly in matters of status, rights, and chances.

Economic Pie

A metaphorical term indicating the total amount of wealth or resources available for distribution within an economy.