The Discounted Payback Rule States That You Should Accept Projects

question 9

Multiple Choice

The discounted payback rule states that you should accept projects:

• A) which have a discounted payback period that is greater than some pre-specified period of time.
• B) if the discounted payback is positive and rejected if it is negative.
• C) only if the discounted payback period equals some pre-specified period of time.
• D) if the discounted payback period is less than some pre-specified period of time.
• E) only if the discounted payback period is equal to zero.

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Definitions:

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single entity has the power to significantly influence market prices.

Market Supply

The total amount of a product that sellers are willing and able to sell across all markets at a given price level over a specific time period.

Market Demand

The cumulative volume of a good or service that all buyers in a market are prepared and able to buy at a range of prices.

Decrease in Demand

This occurs when the quantity of a good or service that consumers are willing and able to purchase at a specific price level declines, due to factors such as changes in preference or income.