Which of the Following Statements Regarding Discounted Payback (DPB) Is/are

question 12

Multiple Choice

Which of the following statements regarding discounted payback (DPB) is/are not true?

• A) It ignores any cash flows that accrue after the project reaches its respective payback benchmark.
• B) Is a capital budgeting method that generates decision rules and associated metrics that choose projects based on how quickly they return their initial investment plus interest.
• C) both a and b are not true.
• D) none of the above.

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Definitions:

Effective Rate

The actual interest rate an investor receives or pays on a financial product, factoring in the effects of compounding.

Amortization Schedule

A table detailing each periodic payment on an amortizing loan, including breakdowns of principal and interest.

Amortizes Loans

Loans for which periodic payments are made that include both interest and principal, gradually reducing the outstanding balance.

Monthly Payments

Regular payments made each month by a borrower to a lender, often as part of a loan repayment plan.