From a fiNance Perspective, Discounted Payback Is Considered to Be

question 81

Multiple Choice

From a finance perspective, discounted payback is considered to be a superior method of analysis as compared to payback. Why then, is discounted payback used less frequently than payback?

• A) Discounted payback applies only to long-term projects.
• B) Discounted payback is more difficult to compute and explain.
• C) Discounted payback is based on net income rather than cash flows.
• D) Discounted payback requires knowledge of a project's internal rate of return.
• E) Discounted payback is liquidity biased where payback is not.

---

Definitions:

Chorion

The outermost membrane surrounding an embryo in mammals, including humans, contributing to the formation of the placenta.

Placenta

This organ, developing within the uterus during pregnancy, functions to feed the fetus with necessary nutrients and oxygen and clear out its waste products.

Gestational Age

The age of an embryo or fetus (or the duration of the pregnancy) starting from the first day of the mother's last menstrual period.

Thirty-Seven

A number, specifically the integer following thirty-six and preceding thirty-eight.