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.

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Definitions:

Conservation

A cognitive ability recognized by Jean Piaget that allows a person to determine that a quantity will remain the same despite adjustment of the container, shape, or apparent size.

Object Permanence

The understanding that objects continue to exist even when they cannot be observed or heard.

Egocentric Thought

A mode of thinking, common in early childhood, where an individual perceives the world solely from their own perspective, often failing to recognize others' viewpoints.

Sing

The act of producing musical sounds with the voice, often with a tune.