Which Statement Regarding Payback Is True

question 91

Multiple Choice

Which statement regarding payback is true?

• A)The shorter a project's payback period, the less 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 take account of cash flows beyond the payback period.
• C)If a project's payback is positive, then the project should be accepted because it must have a positive 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:

Holder in Due Course

A party possessing a negotiable instrument (like a check) in good faith and for value, with certain protections against claims and defenses.

Payable to Cash

A term indicating that a check or other document is made out to "Cash" instead of a specific payee, allowing anyone who holds it to cash it.

Voluntary Transfer

The intentional conveyance of property or rights from one party to another without coercion or force.

Unauthorized Signature

A signature made without the expressed permission of the person purported to have signed, potentially leading to legal or financial complications.