Which of the Following Statements Is CORRECT

question 104

Multiple Choice

Which of the following statements is CORRECT?

• A) The discounted payback method recognizes all cash flows over a project's life, and it also adjusts these cash flows to account for the time value of money.
• B) The regular payback method was, years ago, widely used, but virtually no companies even calculate the payback today.
• C) The regular payback is useful as an indicator of a project's liquidity because it gives managers an idea of how long it will take to recover the funds invested in a project.
• D) The regular payback does not consider cash flows beyond the payback year, but the discounted payback overcomes this defect.
• E) The regular payback method recognizes all cash flows over a project's life.

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Definitions:

Grams

A unit of mass in the metric system, equal to one-thousandth of a kilogram.

Tablespoon

A unit of measure used in cooking, equal to approximately 15 milliliters or half an ounce.

Abbreviation

A condensed version of a word or phrase, utilized to conserve space or prevent redundancy.

Equivalent Measure

A unit of measurement that corresponds to equivalent amounts in different measurement systems.