What are three potential flaws with the regular payback method? Does the discounted payback method correct all

Question:

What are three potential flaws with the regular payback method? Does the discounted payback method correct all three flaws? Explain.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Financial Management

ISBN: 978-0324664553

Concise 6th Edition

Authors: Eugene F. Brigham, Joel F. Houston

See More Books

Question Posted: Oct 05, 2011 09:33 AM

See More Questions

What are three potential explanations for the Beveridge relation?
What is the difference between the regular and discounted payback periods?
What does the payback method measure? What are its major weaknesses?
Millennium Textiles Company makes silk banners and uses the weighted-average method of process costing. Direct materials are added at the beginning of the process, and conversion costs are added...
1. What would be the impact on Top-A1's pro forma net earnings if sales were to change to $200,000? 2. What would be the impact on Top-A1's pro forma long-term debt if sales were to change to...
Consider the ER schema for the MOVIES database in Figure 3.25. Assume that MOVIES is a populated database. ACTOR is used as a generic term and includes actresses. Given the constraints shown in the...
Discuss the pretrial discovery process.
BMW Group, headquartered in Munich, Germany, manufactures several automotive brands including BMW Group, MINI, and Rolls-Royce. Financial information is reported in the euro () monetary unit using...
John is a farmer. In three months, his harvest will be ready and he will sell a big contract of 500,000 pounds of wheat. The spot market price of wheat is now $0.50 per pound but it is likely to...
The Comer Frame Shop wants to know the effect of different inventory costing methods on its financial statements. Inventory and purchases data for June are: (Click the icon to view the inventory and...
How are project classifications used in the capital budgeting process?
Why is the NPV of a relatively long-term project (one for which a high percentage of its cash flows occurs in the distant future) more sensitive to changes in the WACC than that of a short-term...
Mancusco Company uses a flexible budget and standard costs to aid planning and control of its machining manufacturing operations. Its costing system for manufacturing has two direct cost categories...
A gold cathode is illuminated with light of wavelength $250 \mathrm{~nm}$. It is found that the current is zero when $\Delta V=1.0 \mathrm{~V}$. Would the current change if a. The light intensity...
James, Daniella, and Tara all possess identical clocks. As Daniella passes James in her rocket, James observes that her clock runs at $80 \%$ the rate of his clock. As Tara passes in her rocket, in...
Electrons are accelerated from rest through an $8000 \mathrm{~V}$ potential difference. By what factor would their de Broglie wavelength increase if they were instead accelerated through a \(2000...
You're passing a car on the highway. You want to know how much time is required to completely pass the car, from no overlap between the cars to no overlap between the cars. Call your car A, the car...
You are in an airplane cruising smoothly at $600 \mathrm{mph}$. What experiment, if any, could you do that would demonstrate that you are moving, while those on the ground are at rest?
If the input to the $R L C$ circuit of Figure $\mathrm{P}_{10-18}$ is $v_{\mathrm{S}}(i)=u(t)$ : (a) Find the output voltage transform $V_{\mathrm{LC}}(s)$ across $L$ and $C$ taken...
10m solution. If Ka(HA) = 10 then pOH of solution will be [Given : log4=0.6] (A) 6.7 (B) Greater than 6.7 & less than 7.0 (C) Greater 7.0 & less than 7.3 (D) Greater than 7.3
An acyclic organic compound with the formula C 6 H 12 O is found to be optically active, does not decolorize Br 2 (in CCl 4 ), and does not undergo reaction when treated with a mixture of Na 2 Cr 2 O...
Why is some trade credit called free while other credit is called costly? If a firm buys on terms of 2/10, net 30, pays at the end of the 30th day, and typically shows $300,000 of accounts payable on...
Define each of the following loan terms, and explain how they are related to one another: the prime rate, the rate on commercial paper, the simple interest rate on a bank loan calling for interest to...
Why are accruals called spontaneous sources of funds, what are their costs, and why dont firms use more of them?
Suppose that the net income view were to be correct in Problem 1. Describe a profitable investment strategy for investors in the companys bonds and equity if the company were to reduce its debt. What...
A piece of land in Ottawa with an area of 0.5 square kilometers is priced at 5200 Canadian dollars. If there are 0.9955 Canadian dollars per (U.S.) dollar, then what is the price in dollars per...
Marc and Mikkel are married and file a joint tax return. Marc and Mikkel earned salaries this year of $ 6 6 , 2 0 0 and $ 2 5 , 2 0 0 , respectively. In addition to their salaries, they received...

What are three potential flaws with the regular payback method? Does the discounted payback method correct all

Question:

Step by Step Answer:

The regular payback method has three main flaws 1 Doll...View the full answer

Fundamentals of Financial Management

Students also viewed these Corporate Finance questions