Which of the Following Statements Is CORRECT

question 101

Multiple Choice

Which of the following statements is CORRECT?

• 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 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.
• E) One drawback of the discounted payback is that this method does not consider the time value of money,while the regular payback overcomes this drawback.

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Definitions:

User Cost

The opportunity cost of using a durable good, which includes the depreciation of the good and any cost associated with its use, such as maintenance.

Enforceable Property Rights

The legal recognition of an individual's or entity's claims to ownership, which can be defended and upheld in court.

Closer To Extinction

A state or condition where a species is at greater risk of ceasing to exist.

Private Property

The legal right that allows individuals to own, use, and transfer objects, land, and intellectual property.