Author Question: All of the following are considered to be disadvantages of using the payback method EXCEPT the fact that it (Read 56 times)

Evvie72 · **on:** Apr 25, 2021

Question 1

A firm is evaluating a proposal which has an initial investment of $35,000 and has cash flows of $10,000 in year 1, $20,000 in year 2, and $10,000 in year 3. The payback period of the project is
◦ 1 year.
◦ 2 years.
◦ between 1 and 2 years.
◦ between 2 and 3 years.

Question 2

All of the following are considered to be disadvantages of using the payback method EXCEPT the fact that it
◦ ignores the time value of money.
◦ has no clearly defined decision rule.
◦ does not consider cash flows that occur beyond the payback period.
◦ does not adjust for risk.
◦ does not provide a good measure of the project's liquidity.

babybsemail · **Reply #1 on:** Apr 25, 2021

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 25% of students answer this correctly