Which of the Following Statements Is False

question 65

Multiple Choice

Which of the following statements is false?

• A) If the payback period is less than the maximum acceptable payback period, accept the project.
• B) If the payback period is greater than the maximum acceptable payback period, reject the project.
• C) If the payback period is less than the maximum acceptable payback period, reject the project
• D) Two of the above.

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Definitions:

Allocative Efficiency

An economic state where resources are distributed in a way that maximizes the net benefit to society, ensuring that every good or service is produced up to the point where the last unit provides a benefit to consumers exactly equal to the cost of producing it.

Consumer Surplus

The disparity between the amount consumers are prepared to spend on a product or service and the amount they end up paying, indicating the advantage to consumers.

Allocative Efficiency

A state of the economy in which the distribution of resources among different uses is optimized, leading to an optimal level of consumer satisfaction.

Productive Efficiency

A situation in which an economy or entity is operating at maximum capacity, producing goods or services at the lowest possible cost.