The Statement That Is a Disadvantage of the Payback Method

question 44

Multiple Choice

The statement that is a disadvantage of the payback method of investment evaluation is:

• A)it disregards the time value of money.
• B)it disregards the post payback period cash flows.
• C)it is based on cash flows.
• D)Both A and B

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Definitions:

Income Statements

Financial statements detailing a company's revenues, expenses, and profits over a specific period, highlighting operational performance.

Adjusted Trial Balance

A list of all accounts and their balances after adjusting entries have been made, serving as a check that the total debits equal the total credits before financial statements are prepared.

Accrued Fees

Fees that have been incurred but not yet paid, representing a liability on the balance sheet until they are settled.

Journalized

The act of recording a transaction in an accounting journal.