Which of the Following Is a Reason for Firms Not

question 93

Multiple Choice

Which of the following is a reason for firms not using the payback method as a guideline in capital investment decisions?

• A) It gives an explicit consideration to the timing of cash flows.
• B) It cannot be specified in light of the wealth maximization goal.
• C) It is a measure of risk exposure and projects the possibility of a calamity.
• D) It is easy to calculate and has intuitive appeal.

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Definitions:

Individual Benefits

Advantages or gains that accrue directly to a person from their actions or investments.

Flexible Working Hours

Give employees some choice in the pattern of daily work hours.

Absenteeism

The habit or practice of frequently being absent from work or obligations without good reason, leading to potential disruptions and decreased productivity.

Autonomy

The capacity of individuals or groups to make independent decisions and control their own activities, often empowering creativity and innovation.