Which of the Following Statements Is TRUE of Payback Period

question 145

Multiple Choice

Which of the following statements is TRUE of payback period?

• A)If the payback period is less than the maximum acceptable payback period,management should be indifferent.
• B)If the payback period is greater than the maximum acceptable payback period,accept the project.
• C)If the payback period is less than the maximum acceptable payback period,accept the project.
• D)If the payback period is greater than the maximum acceptable payback period,management should be indifferent.

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Definitions:

Forward Contract

A bespoke contract involving two parties for the buying or selling of an asset at an agreed price on a designated future date.

Currency Option

An economic instrument granting the bearer the option to swap currencies at an established rate on a designated date, without the compulsion to proceed.

Foreign Exchange Gain

Profit realized from the conversion of foreign currency into the domestic currency at a higher exchange rate than when it was acquired.

Accounts Payable

A liability to a creditor, carried on an open account, usually for purchases of goods and services.