Asked by
Heather Miller
on Oct 10, 2024
Verified
The payback method is most appropriate for projects whose cash flows do not extend far into the future.
Payback Method
A capital budgeting technique that estimates the time required to recoup the initial investment in a project.
Cash Flows
The inflows and outflows of cash and cash equivalents, representing the operating, investing, and financing activities of an entity.
- Gain insight into the workings of the payback period calculation and understand its shortcomings in investment decision processes.
Verified Answer
KA
Learning Objectives
- Gain insight into the workings of the payback period calculation and understand its shortcomings in investment decision processes.