The Payback Period

question 39

Multiple Choice

The payback period:

• A)Is the length of time necessary to recover the entire cost of an investment from its resulting annual net cash flow.
• B)Is the length of time necessary to recover the entire cost of an investment from its resulting annual net income.
• C)Takes into consideration the profitability of an investment over its entire life,but ignores the timing of its future cash flows.
• D)Takes into consideration both the profitability of an investment over its entire life and the timing of its future cash flows.

Understand the difference between net income and net cash flows from operating activities.

Recognize the types of cash flows associated with operating activities.

Understand the importance and principles of effective customer service.

Identify practices for going above and beyond in customer service.

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Definitions:

Fiduciary Duty

A legal obligation of one party to act solely in the best interest of another party, such as a trustee to the beneficiary, corporate board members to the shareholders, or agents to their principals.

Obligations

Duties or responsibilities that are legally or morally bound to an individual or entity.

Agent

An individual or entity authorized to act on behalf of another, usually in business transactions or legal matters.

Principal

The amount of money borrowed or invested, separate from interest or profit generated from it.