The Payback Rule Can Be Best Stated As

question 248

Multiple Choice

The payback rule can be best stated as:

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

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Definitions:

Undisclosed Principal

A situation in an agency relationship where the identity of the principal is not revealed to the third party by the agent.

Liable

Legally responsible or answerable for an action or a situation.

Scope of Authority

The range or extent of power that an individual or organization legally has to make decisions or take action.

Agent

An individual or entity authorized to act on behalf of another person or entity in business matters or legal transactions.