What are the two drawbacks associated with the payback period a. The time value of money is ignored.It ignores cash flows beyond the payback period b. The time value of money is considered.It ignores cash flows beyond the payback period c. The time value of money is considered.It includes cash flows beyond the payback period d. The time value of money is ignored.It includes cash flows beyond the payback period

What are the two drawbacks associated with the payback period a. The time value of money is ignored.It ignores cash flows beyond the payback period b. The time value of money is considered.It ignores cash flows beyond the payback period c. The time value of money is considered.It includes cash flows beyond the payback period d. The time value of money is ignored.It includes cash flows beyond the payback period

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1MC: An amortization table ________. A. breaks each payment into the amount that goes toward interest and...

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What is the effect on cash when current liabilities decrease? A. Cash increases by the same amount. B. Cash decreases by the same amount. C. Cash decreases by twice as much. D. Cash does not change.
One of the shortcoming of the payback method is that it ignores cash flows after the payback period. True False
Which statement characterizes the time value of money concept? A) The future value of a present dollar is less than one dollar.B) The present value of a future dollar is less than one dollar.C) The timing of cash flows is not relevant to decision making.D) None of the above
The concept of time value of money is that* Note- I am not satisfy give downvote The cash flows that occur earlier are more valuable than cash flows that occur later The cash flows that occur earlier are less valuable than cash flows that occur later The longer the time cash flows are invested, the more valuable they are in the future The future value of cash flows are always higher than the present value of the cash flows
The amount of revenue that is foregone from an alternative use of cash is called a.sunk cost b.differential revenue c.opportunity cost d.differential profit
Which of the following statements are true regarding the payback period of an investment? It does not account for the time value of money No objective criteria exists for what is an acceptable payback period Cash flows occurring after the payback period have no impact on the payback computation All of the above
What happens to cash if the value of other current assets rises? Is it possible that current assets, other from cash, may decrease?
The payback period method is inferior to the net present value method because it ________. is difficult to compute Deals with accounting income rather than cash flows Fails to consider cash flows beyond the payback period
What is the effect on cash when current noncash operating assets decrease? A. Cash increases by the same amount. B. Cash decreases by the same amount. C. Cash decreases by twice as much. D. Cash does not change.
An amortization table ________. A. breaks each payment into the amount that goes toward interest and the amount that goes toward the principal B. is a special table used in a break room to make people feel equitable C. separates time value of money tables into present value and future value D. separates time value of money tables into single amounts and streams of cash
Do not Copy What is the effect on cash when current liabilities increase? A. Cash increases by the same amount. B. Cash decreases by the same amount. C. Cash decreases by twice as much. D. Cash does not change.
The discounted payback method considers the time value of money as well as the cash flows after the payback.Group of answer choices A.false B. true