Without Using Formulas, Provide a Definition of Discounted Payback Period

question 24

Multiple Choice

Without using formulas, provide a definition of discounted payback period.

• A) A project analysis tool that measures the acceptability of a project by determining the length of time required for an investment's discounted cash flows to equal its initial cost.
• B) A project analysis tool that measures the acceptability of a project through the difference between a project's initial investment and whether the present value of its cash flow will repay the investment.
• C) A project analysis tool that measures the acceptability of a project by determining the amount of profit that can be expected based on an investment made.
• D) A project analysis tool that determines the amount of time required for an investment to generate cash flows to recover its initial cost.
• E) A ranking method used to assess projects. PI greater than 1 signify positive NPV projects, while PI less than 1 signify negative NPV projects.

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, capable of owning property, entering into contracts, and being sued.

Promoters

Individuals or companies that engage in the organization and finance of business ventures, events, or performances.

Corporate Form

A legal structure for businesses that is recognized as a separate legal entity from its owners, providing liability protection and other benefits.

Duties

Responsibilities or obligations required by one's role, job, or by law.