The Discounted Payback Rule May Cause

Multiple Choice

The discounted payback rule may cause:

A) Some positive net present value projects to be rejected.
B) The most liquid projects to be rejected in favor of less liquid projects.
C) Projects to be incorrectly accepted due to ignoring the time value of money.
D) Projects with negative net present values to be accepted.
E) Some projects to be accepted which would otherwise be rejected under the payback rule.