The Payback Method of Capital Budgeting May Be Applied to Either

question 2

True/False

The payback method of capital budgeting may be applied to either annuity cash flows or uneven cash flows.

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Definitions:

Inelastic

A characteristic of demand whereby a change in price leads to a lesser change in the quantity demanded, indicating low sensitivity to price changes.

Price Ceilings

Government-imposed limits on how high a price can be charged for a product, service, or commodity.

Equilibrium Price

The charge where the amount of merchandise supplied equals the amount consumers are willing to purchase.

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in price.