Which One of the Following Statements Is Correct Concerning the Payback

question 349

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:

Trade Union

An organization formed by workers from related fields that aims to protect their rights and interests through collective bargaining.

Post-employment Benefit Plan

A financial arrangement designed to provide benefits to employees after their employment has ended, such as pensions.

Subsidiary

A company that is controlled by another company, usually by owning more than 50% of its voting stock.