Question

all the below is true regarding the payback period except Select one: a. does not consider...

all the below is true regarding the payback period except

Select one:
a. does not consider the time value of cash flow
b. does not consider the cash after the payback period
c. the best way to evaluate a long term with large capital projects
d. measures the performance of the management
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Answer #1

Payback period method is not the best method for evaluating long term with large capital project because these are only applicable for projects till they are returning back the initial money so they are not taking entire cash flow into the calculation perspective so they are not the best way to calculate long term projects.

Rest of the options are true regarding payback period because it will not consider time value and it will not consider cash after the payback period.

Correct answer will be option (C) the best way to evaluate a long-term with large capital product

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