The Payback Method Is Often More Useful Than the Net

question 87

True/False

The payback method is often more useful than the net present value method for evaluating systems projects because the effective lives of information systems tend to be short and shorter-payback projects are often desirable.

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Definitions:

Inferior Good

A type of good for which demand decreases as the income of consumers increase, unlike normal goods for which demand increases with an increase in income.

Income Decrease

Income decrease refers to a reduction in the amount of money earned by an individual or received by a household, affecting their ability to spend and save.

Giffen Goods

A type of product that paradoxically experiences increased demand as its price rises, seemingly contrary to the basic law of demand due to the effect on consumption of essential goods.

Inferior Goods

Products whose demand decreases as the income of consumers increases, due to the preference for higher-quality substitutes.