Use the Payback Decision Rule to Evaluate These Projects; Which

question 100

Multiple Choice

Use the payback decision rule to evaluate these projects; which one(s) should be accepted or rejected?

• A) accept both A and B
• B) accept neither A nor B
• C) accept A, reject B
• D) reject A, accept B

---

Definitions:

Units Sold

The total number of units of a product that have been sold during a particular period.

Period Cost

Costs that are not directly tied to the production process and are expensed in the period they are incurred.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one could have received by taking a different action.

Variable Cost

Costs that directly correspond with the degree of production or output levels.