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

Question

Quizplus · Accepted Answer

The payback period rule only accepts investment projects where the payback period for the cash flows is less than the cutoff point (usually set by the company or investor). This means that the project will generate enough cash flows to pay back the initial investment within the desired timeframe. Projects with payback periods greater than the cutoff point are rejected. Therefore, option C is the correct choice.

The Payback Period Rule Accepts All Investment Projects in Which