The Following Are Disadvantages of Using the Payback Rule Except

question 31

Multiple Choice

The following are disadvantages of using the payback rule except the rule

• A)ignores all cash flow after the cut-off date.
• B)does not use the time value of money.
• C)is easy to calculate and use.
• D)does not have the value additivity property.

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Definitions:

Total Product

The overall quantity of output produced by a firm from a given quantity of inputs.

Constant Rate

A consistent, unchanging speed or pace at which something occurs or changes over time.

Diminishing Marginal Returns

The principle that adding an additional factor of production results in a smaller increase in output after a certain point.

Total Product

The total output or production by a firm using a given amount of inputs within a specific period.