Which of the Following Statements About the Evaluation of an Investment

question 144

Multiple Choice

Which of the following statements about the evaluation of an investment having uneven cash flows using the payback method is correct?

• A) It CANNOT be done.
• B) It can be done only by matching cash inflows and investment outflows on a year-by-year basis.
• C) It will produce essentially the same results as those obtained through the use of discounted cash flow techniques.
• D) It requires the use of a sophisticated calculator or computer software.

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Definitions:

Emotional Contagion

A dynamic process through which the emotions of one person are transferred to another, either consciously or unconsciously, through nonverbal channels.

Cognition

Refers to the mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.

Attitude

A psychological construct representing an individual's degree of like or dislike, favorability or unfavourability, towards an object, person, thing, or event.

Cognitive Dissonance

A theory which suggests that people experience psychological discomfort or stress when they hold two or more contradictory beliefs, ideas, or values at the same time.