Evaluate the Following Projects Using the Payback Method Assuming a Rule

question 125

Multiple Choice

Evaluate the following projects using the payback method assuming a rule of 3 years for payback.

• A)Project A can be accepted because the payback period is 2.5 years but Project B cannot be accepted because its payback period is longer than 3 years.
• B)Project B should be accepted because even though the payback period is 2.5 years for Project A and 3.001 for project B,there is a $1,000,000 payoff in the 4th year in Project B.
• C)Project B should be accepted because you get more money paid back in the long run.
• D)Both projects can be accepted because the payback is less than 3 years.

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Definitions:

Osmosis

The movement of water molecules through a semi-permeable membrane from a region of lower solute concentration to a region of higher solute concentration.

Lancet

A small, sharp, and typically pointed surgical instrument used for making small incisions or punctures.

Semipermeable

Describes a barrier or membrane that allows certain substances to pass through it while blocking others.

Cell Wall

A rigid layer outside the plasma membrane of the cells of plants, fungi, and some bacteria, providing structural support and protection.