The Payback Period Rule

question 34

Multiple Choice

The payback period rule:

• A) determines a cutoff point so that all projects accepted by the NPV rule will be accepted by the payback period rule.
• B) determines a cutoff point so that depreciation is just equal to positive cash flows in the payback year.
• C) requires an arbitrary choice of a cutoff point.
• D) varies the cutoff point with the interest rate.
• E) Both determines a cutoff point so that all projects accepted by the NPV rule will be accepted by the payback period rule; and varies the cutoff point with the interest ratE.

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Definitions:

Hard Money

Refers to currency backed by a physical commodity or with intrinsic value, and in politics, to legally specified campaign contributions.

Soft Money

Political contributions made in such a way as to not be subject to federal regulations or limits, often channeled through political parties for "party-building" activities.

Candidate-Centered

Describes political campaigns and politics that focus more on the individual candidates, their characteristics, and issues rather than on party affiliation.

Political Campaigns

Organized efforts which seek to influence the decision-making process within a specific group, often related to elections where candidates seek public office.