The discounted payback rule states that you should accept projects:
A) which have a discounted payback period that is greater than some pre-specified period of time.
B) if the discounted payback is positive and rejected if it is negative.
C) only if the discounted payback period equals some pre-specified period of time.
D) if the discounted payback period is less than some pre-specified period of time.
E) only if the discounted payback period is equal to zero.

Question

Quizplus · Accepted Answer

The discounted payback rule suggests that we should accept projects if their discounted payback period is less than a pre-specified period of time. This means that the cost of the project will be fully recovered within a reasonable and specified timeframe. The other options are incorrect because they either specify a period that is too short (C and E) or do not provide a clear guideline for determining which projects to accept (A and B).

The Discounted Payback Rule States That You Should Accept Projects