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In Capital Budgeting Analyses, the Primary Difference Between the Traditional

Question 28

Multiple Choice

In capital budgeting analyses, the primary difference between the traditional payback period (PB) technique and the discounted payback period (DPB) technique is that the DPB:


A) considers cash flows that occur after the discounted payback period.
B) is always shorter than the traditional payback period.
C) considers the time value of money.
D) ensures a shorter payback period for a project, because projects with longer payback periods generally are accepted using the DPB technique.
E) ensures the amount of the original investment is recovered more quickly from the project's cash flows.

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