Which One of the Following Statements About the Payback Method

question 103

Multiple Choice

Which one of the following statements about the payback method of capital budgeting is correct?

• A) The payback method does NOT consider the time value of money.
• B) The payback method considers cash flows after the payback has been reached.
• C) The payback method uses discounted cash flow techniques.
• D) The payback method will lead to the same decision as other methods of capital budgeting.

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