Which of the Following Statements Best Describes Payback

question 22

Multiple Choice

Which of the following statements best describes payback?

• A) The shorter a project's payback period, the less desirable the project is normally considered to be by this criterion.
• B) One drawback of the payback criterion for evaluating projects is that this method does not take account of cash flows beyond the payback period.
• C) If a project's payback is positive, then the project should be accepted because it must have a positive NPV.
• D) The regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem.

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Definitions:

Self-induction

The property of a circuit or coil that causes it to induce a voltage in itself as a result of a change in current flow, affecting the circuit's own current.

Electro-magnetism

A branch of physics involving the study of electromagnetic forces generated by the interaction between electric charges and currents.

Electro-magnetic Induction

The process by which an electric current is generated in a conductor when it is subjected to a varying magnetic field.

Series Circuit

An electrical circuit in which components are connected end-to-end in a single path for current flow.