The Discounted Payback Rule May Cause

question 9

Multiple Choice

The discounted payback rule may cause:

• A) Some positive net present value projects to be rejected.
• B) The most liquid projects to be rejected in favor of less liquid projects.
• C) Projects to be incorrectly accepted due to ignoring the time value of money.
• D) Projects with negative net present values to be accepted.
• E) Some projects to be accepted which would otherwise be rejected under the payback rule.

---

Definitions:

Conditioned Stimulus

A neutral stimulus that, after it's combined with an unconditioned stimulus, results in triggering a conditioned response over time.

Stimulus Generalization

A learning process in which responses to a specific stimulus are elicited by similar stimuli.

Stimulus Discrimination

The ability to differentiate between similar stimuli and respond differently based on past learning.

2nd Order Conditioning

A form of conditioning in which a stimulus that becomes a conditioned stimulus is used to condition a second stimulus.