The Discounted Payback Rule Can Be Best Stated As

question 181

Multiple Choice

The discounted payback rule can be best stated as:

• A) An investment is acceptable if its discounted payback period is greater than some pre- specified number of years.
• B) An investment should be accepted if the discounted payback is positive and rejected if it is negative.
• C) An investment should be rejected if the discounted payback is positive and accepted if it is negative.
• D) An investment is acceptable if its discounted payback period is less than some pre- specified number of years.

---

Definitions:

Tender Offer

A proposal made by an investor or another company to purchase a substantial amount of a company's shares directly from its shareholders.

Corporate Raider

An investor who buys a large number of shares in a corporation with the aim to gain control of it and make changes to increase its value.