Which of the following is true of the cash payback period?

Which of the following is true of the cash payback period?

a. The longer the payback, the
longer the estimated life of the asset.

b. The longer the payback, the
sooner the cash spent on the investment is recovered.

c. The shorter the payback, the
less likely the possibility of obsolescence.

d. All of these choices are
correct.

a. The longer the payback, the
longer the estimated life of the asset.

b. The longer the payback, the
sooner the cash spent on the investment is recovered.

c. The shorter the payback, the
less likely the possibility of obsolescence.

d. All of these choices are
correct.

a. The longer the payback, the
longer the estimated life of the asset.

a. The longer the payback, the
longer the estimated life of the asset.

a. The longer the payback, the
longer the estimated life of the asset.

a. The longer the payback, the
longer the estimated life of the asset.

a. The longer the payback, the
longer the estimated life of the asset.

a. The longer the payback, the
longer the estimated life of the asset.

b. The longer the payback, the
sooner the cash spent on the investment is recovered.

b. The longer the payback, the
sooner the cash spent on the investment is recovered.

b. The longer the payback, the
sooner the cash spent on the investment is recovered.

b. The longer the payback, the
sooner the cash spent on the investment is recovered.

b. The longer the payback, the
sooner the cash spent on the investment is recovered.

b. The longer the payback, the
sooner the cash spent on the investment is recovered.

c. The shorter the payback, the
less likely the possibility of obsolescence.

c. The shorter the payback, the
less likely the possibility of obsolescence.

c. The shorter the payback, the
less likely the possibility of obsolescence.

c. The shorter the payback, the
less likely the possibility of obsolescence.

c. The shorter the payback, the
less likely the possibility of obsolescence.

c. The shorter the payback, the
less likely the possibility of obsolescence.

d. All of these choices are
correct.

d. All of these choices are
correct.

d. All of these choices are
correct.

d. All of these choices are
correct.

d. All of these choices are
correct.
d. All of these choices are
correct.

Only option C is true.
Payback period is the recovery period of initial investment in a
project. If the payback period is shorter, firm can recover the
invested amount quickly. It gives relief, since the fear of machine
obsolescence is gone.

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