Which of the following statements is TRUE of payback period?

Question

Quizplus · Accepted Answer

The true statement of payback period is that if the payback period is less than the maximum acceptable payback period, management should accept the project. Therefore, Option C is correct. Option A is incorrect because management should accept the project only if payback period is less than the maximum acceptable payback period. Option B is incorrect because if the payback period is greater than the maximum acceptable payback period, management should reject the project. Option D is incorrect because management should not be indifferent if the payback period is greater than the maximum acceptable payback period.

Which of the Following Statements Is TRUE of Payback Period