Which of the Following Is NOT a Limitation of the Payback

question 122

Multiple Choice

Which of the following is NOT a limitation of the payback rule?

• A) It does not consider the time value of money.
• B) Lacks a decision criterion that is economically based.
• C) It is difficult to calculate.
• D) It does not consider cash flows occurring after the payback period.

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Definitions:

Compa-Ratio

A metric comparing an individual's salary to the average for their job or level within the organization, indicating relative pay position.

Broadband Pay Structure

A compensation system that consolidates a large number of pay grades into fewer broad bands, offering flexibility in managing employee salaries.

Fixed Interval Promotion

A promotional strategy where employees are moved up to a higher position or salary grade after a specific, preset period.

Pay Policy Line

A guideline that establishes pay rates for various job positions within an organization, aligning them with market rates and internal valuations.