Which of the Following Is a True Statement About the Use

question 32

Multiple Choice

Which of the following is a true statement about the use of the payback period technique in capital budgeting?

• A) It is simple to use and understand.
• B) It considers the time value of money.
• C) It is not possible to appraise risk with this technique.
• D) It is mainly used to measure profitability of a project.

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Definitions:

Saving

The portion of income not spent on current expenditures or taxes, often put aside for future use or investment.

Induced Consumption

Consumer spending that varies with income levels; as income rises, consumption increases, and as income falls, consumption decreases.

Disposable Income

The sum of money available to a person for spending and saving after they have paid their taxes.

APS

Acute Pharyngitis Score, a clinical tool used to diagnose the likelihood of acute pharyngitis being bacterial in origin. If not in a medical context, clarification is needed as APS can have multiple meanings across different domains.