The Major Difficulty of the Cash Payback Method Is

question 80

Multiple Choice

The major difficulty of the cash payback method is

• A)it includes salvage values at the end of a project.
• B)it ignores net income in its calculation.
• C)it ignores the overall cash flow of the project.
• D)it ignores the overall profitability of the project.

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Definitions:

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership's value in the business.

Major Account Groups

Categories used in financial accounting to organize and summarize the financial activities of a business.

Owner's Equity

The residual interest in the assets of a business after deducting liabilities, representing the owner's claim against the company assets.

Drawing

An account used to record the funds withdrawn from a business by its owner for personal use, reducing the owner's equity.