The payback period ignores the time value of money and therefore should not be used as a
screening device for the selection of capital budgeting projects.
Indicate whether the statement is true or false
FALSE
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RVP Inc. realizes a net profit of $230 million and the owner's equity amounts to $750 million. Calculate the return on equity for the company
A) 16.5% B) 30.7% C) 7.5% D) 75% E) 23.2%
The exchange of land held for investment purposes for stock in a real estate holding corporation held as an investment qualifies for like-kind treatment.
Answer the following statement true (T) or false (F)
In which of the following ways do the ethical theories compare or contrast with Lawrence Kohlberg’s six stages of moral reasoning?
a. Egoism does not correspond well to any of Kohlberg’s stages. b. Virtue ethics, the highest level ethical theory, matches Stage 6, Kohlberg’s highest. c. Utilitarianism can be seen in every Kohlberg stage. d. Cultural relativism is seen most strongly in Stage 1 because of all the cultural influences on early child development.
Which of the following will be used in determining the enforceability of a liquidated damages clause in a contract?
A) The naming of the clause a "liquidated damages clause". B) A statement by the parties that if the contract is breached a set amount of money will be paid by the party in breach to the innocent party. C) An acknowledgement in the clause that the damages set out are a realistic estimate of loss. D) At the time of making the contract the dollar amount is a genuine pre-estimate of the damages that would result from a breach. E) A statement in the clause that the damages payable are not a penalty.