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:

Classical Economics

A school of thought originating in the 18th century, emphasizing free markets, the idea of a self-regulating economy, and the importance of limited government intervention.

General Theory

In the context of economics, it often refers to Keynes's "The General Theory of Employment, Interest, and Money," which argues that aggregate demand is the primary driving force in an economy.

Increase Spending

A policy or action that leads to a higher level of expenditure by individuals, businesses, or the government to stimulate economic activity.

Depression

A prolonged period of significant economic downturn, marked by high unemployment, low output, and declining prices.