Question: What are the two primary drawbacks to the payback period method? a. Difficult to calculate; only works for long projects (e.g., 5 years or more)

What are the two primary drawbacks to the payback period method? a. Difficult to calculate; only works for long projects (e.g., 5 years or more) b. Ignores time value of money; ignores cash flows after payback is reached. c. Only works for long projects; ignores cash flows after payback is reached. d. Difficult to calculate; ignores cash flows after payback is reached e. Difficult to calculate; ignores time value of money

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

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 Finance Questions!

6.Ken Howard has a two-stock portfolio consisting of Acton Inc. and Boron Corp. Assume the following conditions exist. Return on the market = 13% 3-month Treasury bill rate= 6% Acton's beta= 1.15...

6. What are the two primary drawbacks to the payback period method? a. Difficult to calculate; ignores time value of money b. Difficult to calculate; only works for long projects (e.g., 5 years or...

QUESTION 13 Which of the following is not a drawback of the simulation approach? a. The probability distributions of the cash flows are subjective estimates. b. Cash flows in successive periods tend...

What are the two primary drawbacks to the payback method? difficult to calculate; only works for long projects ( e . g . , 5 years or more ) Ignores time value of money; ignores cash flows after...

Question 1 0.3 pts A manager should never pursue a project with a positive net present value (NPV > 0). True False Question 2 0.3 pts The Opportunity Cost of Capital (another name for the discount...

4. Modified Intemal rate of return (MIRR) The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, In reality the relnvested cash...

I need with these problems/exercises listed below (chapters attached). You must use the chapters to fill out the guidance report which is attached. Using the data for March/April Column. Chapter...

1) A project has a net present value of zero. Given this information: A) the project has a zero percent rate of return. B) the project requires no initial cash investment. C) the project has no cash...

For the set of data points provided below, u 0.3 1.5 4.2 6.3 7.2 V 129.3 -50.7 27.5 3.4 70.9 a) Determine the polynomial in the Newton's form that passes through the points. b) Plot the polynomial...

5t, y Suppose z = r sin y, x = -s? 5t2, y = -6st. A. Use the chain rule to find and as functions of x, y, s and t. as at B. Find the numerical values of and when (s, t) = (4, -3). (4, -3) (4, 3) =...

b ) A waterfall model is one of the generic software process models, Explain the phases of the waterfall model and draw a flow diagram to show the iterations of these phases throughout the...

Many police departments are struggling to fill vacancies. If we compared the effectiveness of police departments across the state by how well they are able to compete for new hires, this...

Thanks to an unseasonably warm spring, you will be able to open the first 9 holes of your 18-hole city golf course April 1,two weeks earlier than in prior years.Prepare an announcement that could be...

Inspired by a popular television program, and with an eye toward improving employees general health, your company has decided to sponsor a Biggest Loser Contest.Those interested in participating must...

Global. Appreciation.Elizabeth Morton spent a semester with your family as an exchange student from Australia. Six months after Elizabeth returned home, you and your family spent two weeks with her...