Which of the Following Is NOT True About the Discounted

question 36

Multiple Choice

Which of the following is NOT true about the discounted payback period?

• A) It accounts for the time value of money.
• B) It ignores cash flows beyond the cut-off date.
• C) The choice of the cut-off date is somewhat arbitrary.
• D) Projects with discounted payback periods beyond the cut-off date will be accepted.

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Definitions:

Population Standard Error

A measure that estimates the variability or dispersion of a population parameter based on a sample.

Mean

The average of a set of numbers, calculated by adding all the values together and dividing by the number of values.

Sample Mean

Mean calculated from data for a sample.

Confidence Interval

A set of values, taken from sampled data, that potentially covers the value of an unknown parameter of the population.