Question: Which statement regarding payback is true? Multiple Choice If a projects payback is positive, then the project should be accepted because it must have a

Which statement regarding payback is true?

Multiple Choice

  • If a projects payback is positive, then the project should be accepted because it must have a positive NPV.

  • The shorter a projects payback period, the less desirable the project is normally considered to be by this criterion.

  • One drawback of the payback criterion for evaluating projects is that this method does not take account of cash flows beyond the payback period.

  • The regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem.

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