All of the following are strengths of payback EXCEPT Multiple Choice its benchmark is not determined by a relevant external constraint. it incorporates the time value of money. it uses a conservative reinvestment rate. none of the options.
Added by Lisa A.
Close
Step 1
The payback method is a capital budgeting technique that focuses on the time it takes to recover the initial investment. Show more…
Show all steps
Your feedback will help us improve your experience
Dr. C D and 99 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
All of the following are weaknesses of the payback method except: a. it is easy to calculate b. it ignores cash flow beyond the payback period c. present value of cash flows is not used d. none of the above
Dr. C D.
There are several disadvantages to the payback method, among them: a. Payback ignores the time value of money. b. Payback emphasizes receiving money back as fast as possible for reinvestment. c. Payback is basic to use and to understand. d. Payback can be used in conjunction with time-adjusted methods of evaluation.
Madhur L.
Which one of the following is a disadvantage of the payback method? 1. all of them 2. does not directly account for the time value of money 3. ignores cash flows beyond the payback period. 4. lack an objective market determined benchmark for making decisions
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD