When the Risk of Obsolescence Is High, Managers Will Want

question 122

Multiple Choice

When the risk of obsolescence is high, managers will want

• A) a shorter payback period.
• B) a longer payback period.
• C) a payback period equal to the life of the investment.
• D) All of these.
• E) None of these.

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Definitions:

Asset Account

An account on a balance sheet that represents a resource with economic value owned or controlled by an individual or business.

Liability Account

An account noted on the balance sheet that represents debts or obligations that a company owes to others and must settle over time.

Posting Reference Column

A ledger column used to indicate the account number or code that corresponds to each entry, facilitating cross-referencing between ledgers.

Journal

A book or digital record where transactions are initially recorded before they are posted to ledgers.