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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 38
(2010 CPA Exam, adapted) Which of the following statements is correct regarding the payback method as a capital budgeting technique?
A) The payback method considers the time value of money.
B) An advantage of the payback method is that it indicates if an investment will be profitable.
C) The payback method provides the years needed to recoup the investment in a project.
D) Payback is calculated by dividing the annual cash inflows by the net investment.
A) The payback method considers the time value of money.
B) An advantage of the payback method is that it indicates if an investment will be profitable.
C) The payback method provides the years needed to recoup the investment in a project.
D) Payback is calculated by dividing the annual cash inflows by the net investment.
Explanation
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• The payback period is the time require...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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