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- 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. truedont use chatgpt answer The present value of a future amount: a. will always be less than the future amount b. can be calculated precisely if the discount rate and number of periods is known c. is worth less than the future value d. both a. and b. above are trueAccording to the time value of money concept, also referred to as the present discounted value, is based on the principle that a sum of money in the present has lesser value than the same sum to be paid in the future. Select one: i. True ii. False
- why does an increase in the discount rate resuce the present value?LO 1 8.3 Payback Period Concerning payback: Describe how the payback period is calculated and describe the information this measure provides about a sequence of cash flows. What is the payback criterion decision rule? a. b. What are the problems associated with using the payback period as a means of evaluating cash flows? What are the advantages of using the payback period to evaluate cash flows? Are there any circumstances under which using payback might be appropriate? Explain. с.Question 12 Which of the following methods does not adjust for the time value of money: A internal rate of return B net present value C profitability index D payback period
- 3- Explain briefly demerits of Pay Back Period. One of the demerits of the pay back period method is that it does not consider time value money. Explain with example how discounted pay back period method could sort this shortcoming?Lowering the discount rate on a cash flow will its present value. A. decrease, then increase O B. increase, then decrease O C. decrease D. increaseexplain the concepts of compounding and discounting(Time Value of Money), and give practical examples of each.
- Chapter 10 Homework Questions 1. Explain why money has a time value. 2. What is the difference between simple interest and compound interest? 3. Explain the Rule of 72. 4. What is the meaning of present value (PV)? 5. What do we mean by internal rate of return (IRR)Need help with a and b as well as the last question on whether the internal rate of return is the same as discount rate1. What is the payback period