Question: What are the disadvantages of using the payback period as
What are the disadvantages of using the payback period as a capital- budgeting technique? What are its advantages? Why is it so frequently used?
Answer to relevant QuestionsIn some countries, the expropriation (seizure) of foreign investments is a common practice. If you were considering an investment in one of those countries, would the use of the payback period criterion seem more reasonable ...When might two mutually exclusive projects having unequal lives be incomparable? How should managers deal with this problem? Calculate the MIRR given the following cash flows if the appropriate required rate of return is 10% (use this as the reinvestment rate). YEAR CASH FLOWS 0....... -$ 50,000 1....... 25,000 2....... 25,000 3....... ...Sheinhardt Wig Company is considering a project that has the following cash flows: If the appropriate discount rate is 10 percent, what is the project’s discounted payback? You are considering three independent projects, project A, project B, and project C. Given the following cash- flow information, calculate the payback period for each. If you require a 3- year payback before an investment ...
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