All Else Being Equal, When Using the Payback Period Method

question 52

Multiple Choice

All else being equal, when using the payback period method to compare the capital investment between several options, a company would choose to invest in the capital asset if which of the following is true?

• A)If the payback period equals the amount invested.
• B)If the expected accounting rate of return is less than the required rate of return.
• C)The payback period is the longest of all of the options.
• D)The payback period is the shortest of all of the options.