Which of the Following Statements About the "Payback Method" Is

question 11

Multiple Choice

Which of the following statements about the "payback method" is true?

• A) The payback method considers cash flows after the payback has been reached.
• B) The payback method does not consider the time value of money.
• C) The payback method uses discounted cash-flow techniques.
• D) The payback method generally leads to the same decision as other investment selection methods.

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Definitions:

Price Elasticity

A metric that shows the responsiveness of the quantity of a product demanded when its price changes.

Quantity Demanded

The amount of a good or service that consumers are willing and able to purchase at a given price.

Price Elasticity

An indicator of how the amount of a product that is bought or provided reacts to variations in its cost.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a particular period.