Which ONE of the following statements about the payback method is true? >The pay

Question

Which ONE of the following statements about the payback method is true?

>The payback method is consistent with the goal of shareholder wealth maximization

>The payback method represents the number of years it takes a project to recover its initial investment plus a required rate of return.

>There is no economic rational that links the payback method to shareholder wealth maximization.

>None of these statements are true.

>The payback method is consistent with the goal of shareholder wealth maximization

>The payback method represents the number of years it takes a project to recover its initial investment plus a required rate of return.

>There is no economic rational that links the payback method to shareholder wealth maximization.

>None of these statements are true.

Explanation / Answer

There is no economic rational that links the payback method to shareholder wealth maximization.

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