In Calculation of a Payback Period, What Use Is Made

question 84

Multiple Choice

In calculation of a payback period, what use is made of cash flows occurring after the end of the payback period?

• A)they are ignored.
• B)they are discounted back to time zero.
• C)they are included in the accept/reject decision.
• D)they are normally canceled by initial negative cash flows.

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Definitions:

Merchandise Purchases

The buying of goods for resale, specifically those goods bought by a retailer to be sold to customers.

Operating Expenses

Ongoing costs for running a product, business, or system that do not include cost of goods sold but can include items like salaries and utilities.

Direct Materials Purchases Budget

A financial plan estimating the raw materials a company needs to purchase to meet its production goals.

Plastic Resin

A solid or highly viscous substance of plant or synthetic origin that is typically convertible into polymers.