Which of the Following Statements Is CORRECT

question 84

Multiple Choice

Which of the following statements is CORRECT?

• A) The regular payback method recognizes all cash flows over a project's life.
• B) The discounted payback method recognizes all cash flows over a project's life,and it also adjusts these cash flows to account for the time value of money.
• C) The regular payback method was,years ago,widely used,but virtually no companies even calculate the payback today.
• D) The regular payback is useful as an indicator of a project's liquidity because it gives managers an idea of how long it will take to recover the funds invested in a project.
• E) The regular payback does not consider cash flows beyond the payback year,but the discounted payback overcomes this defect.

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Definitions:

Expected Activities

Forecasted or anticipated actions taken by an individual, group, or organization that aim to achieve certain goals or outcomes.

Financial Statement Effects

The impact of business transactions and events on the financial statements, reflecting changes in financial position.

Budgeted Income Statement

A financial forecast that projects a company's revenue, expenses, and net income for a given period.

Capital Expenditures Budget

The Capital Expenditures Budget is a plan for the funds to be spent on long-term assets that will have a useful life beyond the current fiscal year, such as buildings, equipment, or vehicles.