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When using the payback method, a company must itself set a length of time as its:
ACall-off
BCarry-off
CCut-off
DCash-off
Answer & Solution
Correct answer: C. Cut-off
1. No universal rule exists.
2. Each firm picks its own limit.
3. It sets a cut-off.
_Source: OpenStax Principles of Finance 2e, Chapter 16, How Companies Think about Investing._
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