Managers Generally Use Payback as the Sole Method for Deciding

question 2

True/False

Managers generally use payback as the sole method for deciding whether to invest in an asset.

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Definitions:

Spot Market

The Spot Market is a public financial market in which financial instruments or commodities are traded for immediate delivery.

Foreign Currency

The currency of another country, which is required for foreign trade and investment.

Hedge

An investment or action taken to reduce the risk of adverse price movements in an asset.

Exchange Rate Exposure

The potential for a company's profitability, net cash flow, and market value to change because of a change in exchange rates.