The Primary Disadvantage of the Payback Period Is That

question 79

Multiple Choice

The primary disadvantage of the payback period is that:

• A)it disregards the time value of money.
• B)it is highly complex.
• C)it does not allow the comparisons of alternatives.
• D)it incorporates all cash flows that occur after the payback period.

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Definitions:

Instrumental Values

Values that are seen as a means to an end, guiding how we achieve our goals, such as ambition, efficiency, and courage.

Rationality Strategy

The approach of making decisions based on logical reasoning and systematic analysis to achieve the most optimal outcome.

Appeal to Higher Loyalties

A justification for behavior that is based on the claim that the action was in service of a higher principle or greater good, sometimes used to rationalize unethical acts.

Expense Report

A detailed report produced by employees to document and request reimbursement for expenditures made on behalf of the company.