Which ONE of the Following Statements About the Payback Method

question 82

Multiple Choice

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

• A) The payback method is consistent with the goal of shareholder wealth maximisation
• B) The payback method represents the number of years it takes a project to recover its initial investment plus a required rate of return.
• C) There is no economic rationale that links the payback method to shareholder wealth maximisation.
• D) None of the above statements are true.

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