Use the Following Statements to Answer the Question

question 102

Multiple Choice

Use the following statements to answer the question:
I.The payback period does not take into consideration time value of money
II.In capital budgeting, the most important factor is to recoup the initial investment.

• A)I and II are correct.
• B)I and II are incorrect.
• C)I is correct and II is incorrect.
• D)I is incorrect and II is correct.

---

Definitions:

Opportunity Costs

The cost of foregone alternatives, or what is given up to engage in one activity instead of another.

Efficiency

The extent to which resources are used optimally to achieve a specific outcome with minimal waste.

Incentives

Factors, usually financial or material rewards, that motivate individuals or firms to act in a certain way.

OPEC

The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization of oil-producing countries that coordinates and unifies the petroleum policies of its member states.