The payback period is used most often as a screening tool, by companies that have established a maximum acceptable payback period.

Question

Quizplus · Accepted Answer

The statement is true. The payback period is commonly used by companies to determine whether an investment project is worth pursuing, and having a maximum acceptable payback period helps them filter out projects that would not meet their desired return on investment timelines.

The Payback Period Is Used Most Often as a Screening