A Disadvantage of an Investment with a Short Payback Period

question 40

True/False

A disadvantage of an investment with a short payback period is that it will produce revenue for only a short period of time.

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Definitions:

Opportunity Cost

The cost of what is foregone in order to pursue a certain action or decision.

Bowed-out

A term often used to describe a production possibility frontier that is concave from the origin, indicating increasing opportunity costs as more of one good is produced.

Adaptability

Adaptability is the ability to adjust readily to different conditions, environments, or situations, often considered a crucial skill in both personal and professional contexts.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc.), assuming all resources are fully utilized.