Payback Is Frequently Used to Analyze Independent Projects Because

question 29

Multiple Choice

Payback is frequently used to analyze independent projects because:

• A) it considers the time value of money.
• B) all relevant cash flows are included in the analysis.
• C) it is easy and quick to calculate.
• D) it is the most desirable of all the available analytical methods from a financial perspective.

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Definitions:

US GAAP

The Generally Accepted Accounting Principles in the United States, a framework of accounting standards, principles, and procedures used in the financial reporting of companies.

IFRS

International Financial Reporting Standards, a set of accounting principles that provide guidelines for financial reporting and are recognized globally.

Deferred Taxes

Deferred taxes are future tax liabilities or assets, reflecting the temporary differences between the accounting income and taxable income.

GAAP

Generally Accepted Accounting Principles are a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements in the United States.