The discounted payback rule can be best stated as:
A) An investment is acceptable if its discounted payback period is greater than some pre- speciﬁed number of years.
B) An investment should be accepted if the discounted payback is positive and rejected if it is negative.
C) An investment should be rejected if the discounted payback is positive and accepted if it is negative.
D) An investment is acceptable if its discounted payback period is less than some pre- speciﬁed number of years.

Question

Quizplus · Accepted Answer

The discounted payback rule states that an investment is acceptable if its discounted payback period is less than some pre-specified number of years. This means that the investment should recover its initial cost in less time than the predetermined period. If the payback period is longer than the predetermined time period, the investment should be rejected.

The Discounted Payback Rule Can Be Best Stated As