All of the Following Are Criticisms of the Payback Period

question 57

Multiple Choice

All of the following are criticisms of the payback period criterion except:

• A) Time value of money is not accounted for.
• B) Cash flows occurring after the payback are ignored.
• C) It deals with accounting profits as opposed to cash flows.
• D) None of the above; they are all criticisms of the payback period criteria.

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Definitions:

Essential Resource

Is a resource that is necessary for the survival of an economy or ecosystem, often including items like water, air, and food.

Monopoly Result

The outcome of having a single seller in a market, which can lead to higher prices and less consumer choice.

Economies of Scale

The cost advantage companies achieve due to an increase in production, leading to a reduction in the per-unit cost.

Diseconomies of Scale

A condition in which an increase in production leads to higher long-term average costs, contrary to economies of scale.