Which of the Following Is a Limitation of the Payback

question 56

Multiple Choice

Which of the following is a limitation of the payback period?

• A)This method includes an internal rate of return that is usually less than the required rate of return.
• B)The cash flows after the payback period needed for the calculation are not easy to estimate.
• C)This method ignores the time value of money.
• D)The discount rate used in the calculation often changes.

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Definitions:

Sensory Memory

A type of storage that holds sensory information for a few seconds or less.

Long-term Memory

A kind of memory that holds information for a long duration, from several days to many years.

Memory

The cognitive process of encoding, storing, and retrieving information, playing a vital role in learning and consciousness.

Retain Information

The ability or process of keeping or holding knowledge in the memory for later recall or use.