The Payback Method and the Rate of Return Method Are

question 36

True/False

The payback method and the rate of return method are both conceptually better than the discounted cash flow models because they are based on cash flows.

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Definitions:

ATC

Average Total Cost, refers to the total cost per unit of output, calculated by dividing the total cost by the quantity of output produced.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for full adjustment to any change.

Output

The total amount of goods or services produced by a person, machine, factory, country, etc., within a given period.

ATC

Average Total Cost, the sum of all production costs divided by the quantity of output produced, reflecting the average cost per unit of output.