By Using the Payback Period Method a Decision-Maker

question 27

Multiple Choice

By using the payback period method a decision-maker

• A)equally treats short- and long-term projects.
• B)takes into account the timing of cash flows.
• C)accounts for time value of money.
• D)disregards the need for a fast capital recovery.
• E)favours long-term projects over the short-term projects.

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Definitions:

Demanders

Individuals or entities that express a willingness and ability to purchase goods or services at a given price.

Suppliers

Businesses or individuals that provide goods or services to another entity under terms specified in a contract.

Factors of Production

The resources utilized in the production of goods and services, traditionally categorized into land, labor, and capital.

Circular-Flow Model

A model that illustrates the movement of resources and money between firms and households in an economy.