If a Payback Period for a Project Is Greater Than

question 150

Multiple Choice

If a payback period for a project is greater than its expected useful life, the

• A) project will always be profitable.
• B) entire initial investment will not be recovered.
• C) project would only be acceptable if the company's cost of capital was low.
• D) project's return will always exceed the company's cost of capital.

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Definitions:

Decision-making model

A conceptual framework or process used to make systematic and informed choices among available options.

Vroom, Yetton, and Jago

Refers to a model of decision-making that outlines how leaders can choose among different leadership styles based on certain situational variables.

Authority decisions

decisions made by individuals in positions of power within an organization, often without extensive consultation.

Escalating commitment

A decision-making process where individuals or organizations continue to invest in a failing course of action due to the significant resources already spent.