Which of the statements below is FALSE?
A)To account for the time value of money with the Payback Period Model,the future cash flow needs to be restated in current dollars.
B)The Discounted Payback Period method is the time it takes to recover the initial investment in future dollars.
C)When we discount a future cash flow with our standard time-value-of-money concepts,we inherently assume that the entire cash flow was received at the end of the year.
D)The Discounted Payback Period method does not correct for the cash flow after the recovery of the initial outflow.

Question

Quizplus · Accepted Answer

The Discounted Payback Period method is the time it takes to recover the initial investment in discounted dollars, not future dollars. Therefore, statement B is false. A, C, and D are true statements.

Which of the Statements Below Is FALSE