Which of the following statements is correct regarding the payback method as a capital budgeting technique? a.
Question:
a. The payback method considers the time value of money.
b. An advantage of the payback method is that it indicates if an investment will be profitable.
c. The payback method provides the years needed to recoup the investment in a project.
d. Payback is calculated by dividing the annual cash inflows by the net investment.
Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the...
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c The formula for calculating the payback period is Net Initial Investment Incr...View the full answer
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Related Book For 
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
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