The Payback Method

question 92

Multiple Choice

The payback method:

• A)is the most frequently used method of capital budgeting analysis.
• B)is a more sophisticated method of analysis than the profitability index.
• C)considers the time value of money.
• D)applies mainly to projects where the actual results will be known relatively soon.
• E)generally results in decisions that conflict with the decision suggested by NPV analysis.

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