Question: How does the Payback method's focus on the timing of cash potentially misrepresent a project's risk profile? The Payback method usually captures all aspects of

How does the Payback method's focus on the timing of cash potentially misrepresent a project's risk profile? The Payback method usually captures all aspects of a project's risk may underestimate the risk of short term projects while overestimating the risk of long term ones may underestimate the risk of projects with large

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future positive cash may overestimate project risk

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leading to overly conservative decisions

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