Which of the Following Statements Is Correct? Assume That the Project

question 54

Multiple Choice

Which of the following statements is correct? Assume that the project being considered has normal cash flows,with one outflow followed by a series of inflows.

• A)The longer a project's payback period, the more desirable the project is normally considered to be by this criterion.
• B)One drawback of the payback criterion for evaluating projects is that this method does not properly account for the time value of money.
• C)If a project's payback is positive, then the project should be rejected because it must have a negative NPV.
• D)The regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem.

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Definitions:

Stress Management Strategy

A set of techniques and programs aimed at controlling a person's level of stress, especially chronic stress, to improve everyday functioning.

Physical-Fitness Program

A structured regimen or plan designed to improve an individual's physical health and performance.

Economies of Scale

Reductions in the average cost of a product due to increased production levels.

Diseconomies of Scale

An increase in production costs as the scale of production goes up, leading to reduced efficiency.