Firms That Make Investment Decisions Based on the Payback Rule

question 85

Multiple Choice

Firms that make investment decisions based on the payback rule may be biased toward rejecting projects:

• A) with short lives.
• B) with long lives.
• C) with late cash inflows.
• D) that have negative NPVs.

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Definitions:

Sequentially

Occurring or following in a logical order or sequence.

Flashbulb Memories

Vivid, detailed memories of significant or traumatic events that feel as if they were captured in a moment of "flash," often maintaining their clarity over time.

Periodic Revision

The scheduled reassessment and update of a document, system, or process at regular intervals.

Significant Events

are occurrences or milestones that have a profound impact on an individual's life or on the course of history, often leading to substantial changes or developments.