Which Statement Regarding Payback Is True

question 91

Multiple Choice

Which statement regarding payback is true?

• A)The shorter a project's payback period, the less desirable the project is normally considered to be by this criterion.
• B)One drawback of the payback criterion for evaluating projects is that this method does not take account of cash flows beyond the payback period.
• C)If a project's payback is positive, then the project should be accepted because it must have a positive NPV.
• D)The regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem.

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Definitions:

Possesses

To have or hold property, items, or qualities, indicating ownership or control over such.

Receive

The act of accepting or taking possession of something that has been given, sent, or awarded to someone.

Destination Contracts

Contracts specifying that the seller is responsible for the delivery of goods to a specific destination.