Which of the Following Statements Is CORRECT

question 87

Multiple Choice

Which of the following statements is CORRECT?

• A) one drawback of the regular payback is that this method does not take account of cash flows beyond the payback period.
• B) if a project's payback is positive, then the project should be accepted because it must have a positive npv.
• C) the regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem.
• D) one drawback of the discounted payback is that this method does not consider the time value of money, while the regular payback overcomes this drawback.
• E) the shorter a project's payback period, the less desirable the project is normally considered to be by this criterion.

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Definitions:

Balance Sheet Columns

Sections in a balance sheet that categorize assets, liabilities, and shareholder's equity at a specific point in time.

Unearned Revenue

Money received by a company for goods or services not yet delivered or provided; often considered a liability.

Classified Balance Sheet

A financial statement that organizes a company's assets, liabilities, and shareholders' equity into subcategories, providing a detailed snapshot of the company’s financial health at a specific point in time.

Property, Plant, And Equipment

Long-term assets vital to business operations and not easily converted into cash, including land, buildings, and machinery.