Which of the Following Statements Are True Regarding the Payback

question 59

Multiple Choice

Which of the following statements are true regarding the payback period?

• A) The time value of money is considered when calculating the payback.
• B) The payback analysis is more accurate than the net present value analysis.
• C) The payback period is less accurate than the accounting rate of return.
• D) The time value of money is not considered when calculating the payback.

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Definitions:

Market Income

The total income earned by an individual or household from market sources before taxes and transfers, including wages, rent, interest, and profits.

Disposable Income

The sum of funds households can allocate towards savings or expenditure once income taxes are deducted.

Minimum Wage

The lowest hourly, daily, or monthly remuneration that employers may legally pay to workers.

Federal Minimum Wage

The lowest legal hourly wage that employers can pay to workers in the United States.