The Regular Payback Method Has a Number of Disadvantages, Some

question 98

Multiple Choice

The regular payback method has a number of disadvantages, some of which are listed below. Which of these items is NOT a disadvantage of this method?

• A) lack of an objective, market-determined benchmark for making decisions
• B) ignores cash flows beyond the payback period
• C) does not directly account for the time value of money
• D) does not provide any indication regarding a project's liquidity

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Definitions:

Shareholder Voting

The process by which shareholders exercise their right to vote on corporate matters, such as elections for the board of directors or decisions on corporate policies.

Libertarian

A political ideology that emphasizes individual liberty, advocating for minimal government interference in personal and economic matters.

Social Ethics

The branch of ethics that concerns itself with the principles of morality governing individuals as members of a community or society.

Market Outcomes

The results of interactions between buyers and sellers in a market, determining the allocation of resources and the distribution of goods and services.