Evaluate the Following Projects Using the Payback Method Assuming a Rule

question 119

Multiple Choice

Evaluate the following projects using the payback method assuming a rule of 3 years for payback.

• A) Project A can be accepted because the payback period is 2.5 years but Project B cannot be accepted because its payback period is longer than 3 years.
• B) Project B should be accepted because even though the payback period is 2.5 years for Project A and 3.001 for project B, there is a $1,000,000 payoff in the 4th year in Project B.
• C) Project B should be accepted because you get more money paid back in the long run.
• D) Both projects can be accepted because the payback is less than 3 years.

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Definitions:

Political Tactics

Strategies used within an organization to gain advantage or support for one's goals or interests.

Institutionalization

Institutionalization is the process through which certain practices, relationships, or norms become established and accepted as a part of society or organization's culture.

Power

Refers to the capacity or ability of an individual or group to influence or control the actions and outcomes within an organization or society.

Legitimating Tactic

Legitimating tactic refers to strategies or actions undertaken by an individual or organization to justify or validate decisions, policies, or practices to gain acceptance or compliance from others.