The Discounted Payback Method

question 76

Multiple Choice

The discounted payback method

• A)discounts a project's initial cost.
• B)is simpler and more reliable than the payback period.
• C)is as reliable as NPV because both methods use discounted cash flo.
• D)uses an arbitrary cutoff period.
• E)ignores a project's initial costs.

---

Definitions:

Work in Process

Partially finished goods that are in the process of being converted into final products within a manufacturing process.

Cost of Goods Manufactured

The total cost incurred to produce products during a specific period, including costs of direct materials, direct labor, and manufacturing overhead.

Direct Materials

Basic materials that are directly involved in the creation of a product and form a crucial part of the completed item.

Cost of Goods Sold

The immediate expenses linked to creating a company's sold products, encompassing both materials and wages.