Payback Is Frequently Used to Analyze Independent Projects Because

question 50

Multiple Choice

Payback is frequently used to analyze independent projects because:

• A)it is easy and quick to calculate.
• B)all relevant cash flows are included in the analysis.
• C)it considers the time value of money.
• D)it is the most desirable of all the available analytical methods from a financial perspective.
• E)it produces better decisions than those made using either NPV or IRR.

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Definitions:

Aggregate Demand

Aggregate demand is the total demand for all goods and services in an economy at a given overall price level and in a given time period.

Active Stabilization Policy

Government policies aimed at reducing economic fluctuations through fiscal and monetary actions.

Fiscal Policy

Government policies related to taxation and spending that aim to influence economic conditions.

Monetary Policy

The set of actions by a central bank or monetary authority to control the supply of money and interest rates in its economy.