When Calculating a Project's Payback Period, Cash Flows Are Discounted

question 42

Multiple Choice

When calculating a project's payback period, cash flows are discounted at:

• A) the opportunity cost of capital.
• B) the internal rate of return.
• C) the risk-free rate of return.
• D)a discount rate of zero.

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Definitions:

Lowball Technique

Getting someone to commit to an attractive proposition before its hidden costs are revealed.

Hidden Costs

Expenses not readily apparent at the time of purchase or decision-making, which can make a product or service more expensive than initially thought.

Cognitive Dissonance

A psychological state of tension that occurs when an individual holds two conflicting thoughts, beliefs, attitudes, or values at the same time.

Techniques of Persuasion

Methods or strategies used to convince or influence others to change their attitudes, beliefs, or actions.