Which of the Following Statements Is CORRECT? Assume That the Project

question 28

Multiple Choice

Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows.

• A) One drawback of the regular payback for evaluating projects is that this method does not properly account for the time value of money.
• B) If a project's payback is positive, then the project should be rejected because it must have a negative NPV.
• C) The regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem.
• D) If a company uses the same payback requirement to evaluate all projects, say it requires a payback of 4 years or less, then the company will tend to reject projects with relatively short lives and accept long-lived projects, and this will cause its risk to increase over time.
• E) The longer a project's payback period, the more desirable the project is normally considered to be by this criterion.

---

Definitions:

Exudative

Pertaining to the oozing or discharge of fluid from a wound or body cavity.

Hydrocolloid Dressing

A type of adhesive dressing that forms a gel when in contact with wound fluid, providing moist wound healing and protection against infection.

Second Intention

A method of wound healing where the wound is left open and allowed to close naturally without surgical closure.

Heavy Exudate

A condition characterized by the release of large amounts of fluid and proteins from blood vessels into surrounding tissues, commonly seen in wounds.