The discounted payback period rule:
A: considers the time value of money.
B: discounts the cutoff point.
C: ignores uncertain cash flows.
D: is preferred to the NPV rule.
E: None of the above.
A: considers the time value of money.
B: discounts the cutoff point.
C: ignores uncertain cash flows.
D: is preferred to the NPV rule.
E: None of the above.
举一反三
- The payback period rule: A: discounts cash flows. B: ignores initial cost. C: always uses all possible cash flows in its calculation. D: Both A and C. E: None of the above.
- The payback period rule A: varies the cut-off point with the interest rate. B: determines a cut-off point so that all projects accepted by the NPV rule will be accepted by the payback period rule. C: requires an arbitrary choice of a cut-off point. D: varies the cut-off point with the interest rate and requires an arbitrary choice of a cut-off point.
- The following are disadvantages of using the payback rule except the rule A: ignores all cash flow after the cut-off date. B: does not use the time value of money. C: is easy to calculate and use. D: does not have the value additivity property.
- Which of the following statements is least accurate A: The discounted payback period frequently ignores terminal values. B: The discounted payback period is generally shorter than the regular payback period. C: The discounted payback period is the time it takes for the present value of the project"s cash inflows to equal the initial cost of the investment.
- Which of the<br/>following is NOT a limitation of the payback rule? A: It does not consider the time value of money. B: Lacks a decision criterion that is economically based. C: It is difficult to calculate. D: It does not consider cash flows occurring after the payback<br/>period.