Some Firms Use the Payback Period as a Decision Criterion

Multiple Choice

Some firms use the payback period as a decision criterion or as a supplement to sophisticated decision techniques, because ________.

A) it explicitly considers the time value of money
B) it can be viewed as a measure of risk exposure due to its focus on liquidity
C) the determination of the required payback period is an objectively determined criteria
D) it considers the timing of cash flows and therefore the time value of money