What is the main drawback of using the payback period method? In financial a) It’s too complexb) It ignores profitabilityc) It uses discounted cash flowsd) It favors risky projects i need
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What is the main drawback of using the payback period method? In financial
a) It’s too complex
b) It ignores profitability
c) It uses discounted cash flows
d) It favors risky projects
i need
Step by step
Solved in 2 steps
- Disadvantage of the payback method include: Answer choices are below: A) does not consider cash flows past payback period. B) the most common version does not account for time value of money. C) has a bias against long-term projects such as research and development and new product launches. D) all of the above.Which of the following are significant flaws with the Payback Period Method? (Select all that apply) A. Biased against long-term projects B. Uses an arbitrary benchmark C. Very rarely used in practice D. Uses accounting profits rather than cash flows E. Ignores Time Value of MoneyWhich of the following is a disadvantage of the IRR project evaluation method? Select one: a. It does not take into account the time value of money. b. If there are negative cash flows after positive cash flows, there may be zero or multiple internal rates of return. c. It does not make adequate allowance for risk. d. It focuses on accounting profit rather than cash flow as the source of value.
- Which of the following is a disadvantage of the IRR project evaluation method? Question 5Select one: a. It does not take into account the time value of money. b. If there are negative cash flows after positive cash flows, there may be zero or multiple internal rates of return. c. It does not make adequate allowance for risk. d. It focuses on accounting profit rather than cash flow as the source of value.Which are problems of the payback criterion? Check all that apply: It ignores cash flows after the cutoff date. It ignores the time value of money. It doesn't show the value created by a project. It doesn't fully reflect the risk of a project. It uses an arbitrary cutoff value. It is difficult to calculate.Which of the following is a disadvantage of the discounted payback period method? Multiple choice question. It ignores cash flows beyond the cutoff date. It may accept negative estimated NPV investments. It is unbiased toward liquidity. It does not include the time value of money.
- Why the payback method is often considered inferior to discounted cash flow in capital investment appraisal? Select one: a. It is more difficult to calculate b. It does not calculate how long it will take to recoup the money invested c. It only takes into account the future income of a project d. None of the option e. It does not take account of the time value of moneyA major problem with the discounted payback period is that Blank______. Multiple choice question. the time value of money is ignored the cash flows beyond the cutoff date are ignored cost of implementation is ignored opportunity costs are ignoredWhat does a negative net present value (NPV) indicate? a) The project is profitable.b) The project is not viable.c) The project’s return is equal to the discount rate.d) The project has no cash inflows. I need help in this .
- Which of the following is an advantage of the internal rate of return (IRR) rule? Multiple choice question. It is easy to understand and communicate. It can be applied to projects with non-conventional cash flows. It always gives multiple IRRs for non-conventional cash flows. It needs less input data than the NPV method.Help plsWhich of the following is a disadvantage of the internal rate of return (IRR) rule? Multiple choice question. It always leads to a decision that conflicts with the decision of the NPV method. It results in multiple answers for conventional cash flows. It may lead to incorrect decisions when comparing mutually exclusive investments. It needs more input data than the NPV method.
