Many Firms Today Continue to Use the Payback Method but Also

question 90

True/False

Many firms today continue to use the payback method but also employ the NPV or IRR methods,especially when large projects are being analyzed.

---

Definitions:

Operating Lease

A contract that allows for the use of an asset but does not convey rights of ownership of the asset.

After-Tax Cost

The actual cost to a company or individual after considering the effects of taxes, often used in evaluating the cost of financing options.

Leasing Analysis

It is the examination of the financial aspects of leasing to determine whether leasing is a more viable option than purchasing.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in alignment with the firm's goal of shareholder value maximization.