Which one of the following statements is correct?
A)A longer payback period is preferred over a shorter payback period.
B)The payback rule states that you should accept a project if the payback period is less than one year.
C)The payback period ignores the time value of money.
D)The payback rule is biased in favor of long-term projects.
E)The payback period considers the timing and amount of all of a project's cash flows.

Question

Quizplus · Accepted Answer

The payback period ignores the time value of money, as it simply calculates the time needed to recover the initial investment without considering the present value of future cash flows.

Which One of the Following Statements Is Correct