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14) Do firms usually use the Payback Period model for small-dollar decisions? Why?

14) Do firms usually use the Payback Period model for small-dollar decisions? Why?

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Many companies use the payback period for small-dollar judgments as the time consumed collecting the precise cash flow may be dropped significantly if it is essential to approximate only through the first few years. Many companies use the payback period for small-dollar verdicts as the accuracy of future cash flows on these smaller projects may be quite tough to assess far into the future. Many companies use the payback period for small-dollar choices because it does prevent a thoughtful error when the future cash flow is never adequate to recover the initial cash outlay

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