Under the Payback Method of Analysis

question 248

Multiple Choice

Under the payback method of analysis:

• A) The initial cash outlay is ignored.
• B) The cash flow in year 3 is ignored if the required payback period is 4 years.
• C) A project's initial cost is discounted.
• D) The cash flow in year 2 is valued just as highly as the cash flow in year 1 as long as the required payback period is 3 years or more.
• E) A project will be acceptable whenever the payback period exceeds the pre-specified number of years.

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