Question: We use payback period as one method to determine whether or not to undertake a project. It is a simple method that works well for

We use payback period as one method to determine whether or not to undertake a project. It is a simple method that works well for small investments. It does have weaknesses which include the following EXCEPT: Question 16 options:

it does not always recognize all cash flows

it does not incorporate the time value of money

it works best when interest rates are high

the appropriate payback period is subjectively determined

Step by Step Solution

★★★★★

3.37 Rating (144 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The detailed answer for the above question is provided below The correct answer is it works best whe... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

On July 1, 2022, the first day of its 2023 fiscal year, the Town of Bear Creek issued at par $2,000,000 of 2 percent term bonds to renovate a historic wing of its main administrative building. The...

Consider the trigonometric series a0 2 + X r=1 (ar cos rx + br sin rx) where a0, a1, a2, . . . and b1, b2, . . . are constants and suppose that f(x) is a periodic function of x with period 2. (a)...

Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...

Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...

We use payback period as one method to determine whether or not to undertake a project. It is a simple method that works well for small investments. It does have weaknesses which include the...

We use payback period as one method to determine whether of not to undertake a projects. It is a simple method that works well for small investments. It does have weaknesses which include the...

We use payback period as one simple method to determine whether or not to undertake a project. The result of a payback period calculation is presented in terms of: Percentage terms (%) Dollar terms...

When analyzing an investment opportunity such as launching a new and improved version of an existing product or introducing a new product that will impact an existing product, why is it important to...

On March 1 2 , 2 0 2 5 , Emily Carter, CFO of Horizon Manufacturing Ltd . , was preparing for a meeting with the capital budget committee scheduled for the following week. On her desk was a capital...

1. Chapter 18 Questions and Problems 2 - APV Knotts, Inc., an all-equity firm, is considering an investment of $1.2 million that will be depreciated according to the straight-line method over its...

6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal...

7. Find an equation for the conic that satisfies the given conditions. Hyperbola foci (0,6), vertices (0, 3) A. 6x2 = y (x-6)2 . 27 = 1 36 c. = y D. -1 36 27 y2 . 9. 1 27

Consider the multiple regression model with three independent variables, under the classical linear model assumptions MLR. 1 through MLR.6: y = (0 + (1x1 + (2x2 + (3x3 + u. You would like to test the...

I need the balance sheet but the answer given is not correct. The only drop down options that I have are the following: Cash payment for expenses, Cash payment on debt, Cash receivable for customers,...

In the year ended December 31, 2017, Hexham Inc. (Hexham) reported net income of $7,400,000, which included a writeoff? of $2,000,000 of company assets. During 2017 accounts receivable? A writeoff is...

In 2017, Anyox Ltd. (Anyox) reported net income of $200,000. All revenues and expenses were in cash, except for a $30,000 depreciation expense. Required: a. Calculate cash from operations for Anyox...

On, July 15, 2016, Tidnish Vessel Refitters Ltd. (Tidnish) signed a contract to refit a 25-year-old supertanker to meet new environmental standards and operate more efficiently. Tidnish has provided...

For each of the following land sales, prepare the journal entry that would be recorded and indicate the amount of the gain or loss that would be reported. Assume that in each case the sale of land...

Natick Industries leased high-tech instruments from Framingham Leasing on January 1, 2018. Natick has the option to renew the lease at the end of two years for an additional three years. Natick is...

Section 3: Use this data to fill in the Final Income Statement below. Use FIFO if necessary. Use straight line depreciation if necessary. (50 points) a) Sales for the year were: $2,000 in Jan,...

1. What type of instrument was the check when Herrera found it? 2. What type of instrument was the check when Herrera added his name to the Pay to line? 3. Could Herrera be charged with forgery?...

1. When was there a dishonor of the check? What is the significance of that time? 2. Why does the dissenting judge disagree with the majoritys decision? 3. What do you learn about cautions that...

1. Why is the problem with the experts objections important in determining whether DOIs moratorium was arbitrary and capricious? 2. What is the significance of the difference between the factual...

Which of the following has a more elastic demand in the short run? a. Pomegranate juice or drinking water? b. Cereal or Rice Krispies? c. Speedboats or gourmet chocolate?

Price increases from $10 to $20. Demand is ______ and total revenue ______.

Three points are identified on the graph in Figure 4P-1. a. At point A, demand is ____. b. At point B, demand is ____. c. At point C, demand is ____.