The following are disadvantages of using the payback rule except:
A) The payback rule ignores all cash flow after the cutoff date
B) The payback rule does not use the time value of money
C) The payback period is easy to calculate and use
D) The payback rule does not have the value additive property

Question

Quizplus · Accepted Answer

This question asks for the disadvantage(s) of using the payback rule. Options A, B, and D all state valid disadvantages of the payback rule, but option C states an advantage instead of a disadvantage. Therefore, the best choice is option C.

The Following Are Disadvantages of Using the Payback Rule Except