Which of the Following Statements Is NOT a Disadvantage of the Regular

question 50

Multiple Choice

Which of the following statements is NOT a disadvantage of the regular payback method?

• A) Ignores cash flows beyond the payback period.
• B) Does not directly account for the time value of money.
• C) Does not provide any indication regarding a project's liquidity or risk.
• D) Does not take account of differences in size among projects.
• E) Lacks an objective, market-determined benchmark for making decisions.

---

Definitions:

Periodic Inventory Method

An accounting approach where inventory is physically counted at specific intervals to determine the cost of goods sold.

Merchandise Purchase

Refers to the acquisition of goods to be sold in the normal course of business.

Credit Terms

The conditions under which credit will be extended to a borrower, including the repayment schedule, interest rate, and the term of the loan.

Financial Statement

Documents that present an organization's financial performance and position, including the balance sheet, income statement, and cash flow statement.