The discounted payback rule states that you should accept projects:
A) which have a discounted payback period that is greater than some pre-specified period of time.
B) if the discounted payback is positive and rejected if it is negative.
C) only if the discounted payback period equals some pre-specified period of time.
D) if the discounted payback period is less than some pre-specified period of time.

Question

Quizplus · Accepted Answer

The discounted payback rule suggests accepting projects if the period it takes to recover the initial investment, after discounting the cash flows, is less than a pre-specified period of time. This method considers the time value of money, unlike the simple payback rule.

The Discounted Payback Rule States That You Should Accept Projects