According to one study done some time ago, most small firms use the _____ method to evaluate capital projects.

Question

Quizplus · Accepted Answer

The payback method is commonly used by small firms to evaluate capital projects because it is simple and easy to understand. This method determines the amount of time it takes for a project to generate enough cash inflows to recover the initial investment. Small firms may not have the resources to conduct more complex and time-consuming methods such as NPV or IRR. Therefore, payback method is the best choice for most small firms.

According to One Study Done Some Time Ago, Most Small