The Principal Weakness of the Payback Method for Evaluating Proposed

question 64

Multiple Choice

The principal weakness of the payback method for evaluating proposed investments is that it does not:

• A)provide a way of ranking projects in order of desirability.
• B)consider cash flows that continue after the investment has been recovered.
• C)result in an easily understood "answer."
• D)recognize the time value of money.

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Definitions:

Important Customer

A customer considered valuable to a business due to factors like frequent purchases, high order value, or strategic significance, warranting special attention or service.

Product vs. Service

A comparison between tangible items (products) and intangible activities (services) offered in the market.

Chicken

A type of poultry and common domesticated fowl, widely consumed as meat and eggs across the globe.

Chef

A professional cook, often the head of a kitchen, who is responsible for preparing meals in restaurants or other establishments.