A Disadvantage of the Payback Period Is That It Ignores

question 127

True/False

A disadvantage of the payback period is that it ignores a project's total profitability.

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Definitions:

Marginal Decision Rule

A principle stating that an action should be taken if, and only if, the marginal benefit exceeds the marginal cost.

Profit-Maximizing

The strategy or procedure for altering sales and production to attain the greatest possible earnings.

Market Price

The amount of money for which a good or service is offered, sold, or bought in the market.

Perfectly Competitive

A market structure characterized by many sellers and buyers, homogeneous products, and free entry and exit, leading to price takers.