A Characteristic of the Payback Method Is That It

question 102

Multiple Choice

A characteristic of the payback method is that it

• A) Cannot incorporate into the calculation the time value of money.
• B) Neglects total project profitability (i.e., profitability over the entire life of the project).
• C) Uses accrual accounting numbers in the numerator of the calculation.
• D) Uses the estimated life of the asset in the denominator of the calculation.
• E) Uses the hurdle (i.e., discount) rate in the calculation.

---

Definitions:

Punctuated Equilibrium Model

A model of group development that describes how groups with deadlines are affected by their first meetings and crucial midpoint transitions.

First Meetings

Initial encounters between individuals or groups, critical in establishing relationships and setting the tone for future interactions.

Midpoint Transitions

Significant changes or shifts in strategy, approach, or direction that occur at the halfway point of a project or timeframe.

Group Development

A dynamic process through which groups evolve over time, typically moving through stages of forming, storming, norming, performing, and adjourning.