Which Statement Below Is True About the Evaluation of an Investment

question 85

Multiple Choice

Which statement below is true about the evaluation of an investment having uneven cash flows using the payback method?

• A) It cannot be done.
• B) It can be done only by matching cash inflows and investment outflows on a year-by-year basis.
• C) It will produce essentially the same results as those obtained through the use of discounted cash flow techniques.
• D) It requires the use of a sophisticated calculator or computer software.

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Definitions:

Particular Consequence

Specific outcomes or results that follow from a particular action, decision, or event, with implications for those involved.

Reinforcement Theory

A theory that posits behavior is motivated by its consequences, with reinforcement used to either increase desired behaviors or decrease unwanted ones.

Reinforcement and Reward

Strategies for strengthening or increasing a desired behavior by providing positive outcomes or incentives following that behavior.

Desirable Behavior

Actions or conduct encouraged within a group or society because it is considered beneficial or socially valued.