Which of the Following Is False Concerning the Payback Method

question 79

Multiple Choice

Which of the following is False concerning the Payback method of capital budgeting?

• A) It uses the accrual accounting rate of return.
• B) The payback method highlights liquidity.
• C) Its major strength is that it that it is easy to use.
• D) It does not project cash flows after the recovery of the initial investment.
• E) Shorter payback periods give an organization more flexibility.

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Definitions:

Tariff

A tax imposed by a government on goods and services imported from other countries to protect domestic industries from foreign competition.

Domestic Price

The price of goods or services within a country's borders, as opposed to international or export prices.

Tariff

A tax imposed by a government on imported or exported goods, often used to restrict trade, as they increase the price of imported or exported goods, making them less attractive to consumers.

Consumer Surplus

The difference between the total amount consumers are willing to pay for a product or service and the total amount they actually pay.