Which One of the Following Statements Is Correct Concerning the Payback

question 273

Multiple Choice

Which one of the following statements is correct concerning the payback period?

• A) An investment is acceptable if its calculated payback period is less than some pre- specified period of time.
• 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 period of time.
• E) An investment should be accepted any time the payback period is less than the discounted payback period, given a positive discount rate.

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Definitions:

Experimental

Relating to a scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact.

Control Group

In experimental research, a group of subjects that does not receive the treatment being tested and is used as a benchmark to measure how the other tested groups do.

Correlation Coefficient

A statistical measure that indicates the extent to which two variables fluctuate together, ranging from -1 (a perfect negative correlation) to +1 (a perfect positive correlation).

Biased Sample

A sample that does not accurately represent the population from which it was drawn, leading to skewed or misleading results.