This week you started reading Module 6 and you were introduced to the concept of payback Explain some of the potential pitfalls of using payback period in evaluating an investment decision Some things to consider as you answer include these questions Does the interest rate play a role Why would a company choose payback over something like net present value in making a decision What are the problems that are created in having so many options available to decision makers

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Question: This week you started reading Module 6 and you were introduced to the concept of payback. Explain some of the potential pitfalls of using payback

This week you started reading Module 6 and you were introduced to the concept of payback. Explain some of the potential pitfalls of using payback period in evaluating an investment decision.

Some things to consider as you answer include these questions.

Does the interest rate play a role?
Why would a company choose payback over something like net present value in making a decision?
What are the problems that are created in having so many options available to decision makers?

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