Which of the Following Is an Advantage of the Payback

question 35

Multiple Choice

Which of the following is an advantage of the payback method?

• A) The technique is simple for managers to compute and interpret.
• B) It is a good measure of liquidity risk.
• C) Both a and b
• D) None of the above

---

Definitions:

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a period when all factors of production can vary.

Output

Refers to the quantity of goods or services produced in a given time period by a firm or economy.

Short-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied by producers in the short term, under fixed resources and technologies.

Break-Even Point

The low point on the firm’s average total cost curve. If the price is below this point, the firm will go out of business in the long run.