The payback period rule accepts all investment projects in which the payback period for the cash ﬂows is:
A)equal to the cut-off point.
B)greater than the cut-off point.
C)less than the cut-off point.
D)positive.
E)None of the above.

Question

Quizplus · Accepted Answer

The payback period rule states that an investment project should be accepted if the payback period for the cash flows is less than a predetermined cut-off point. Therefore, the correct answer is C) less than the cut-off point.

The Payback Period Rule Accepts All Investment Projects in Which