The payback period rule is a convenient and useful tool because:
A) it provides a quick estimate of how rapidly the initial investment will be recouped.
B) results of a short payback rule decision will be quickly seen.
C) it does not have to take into account time value of money.
D) All of these.
E) None of these.

Question

Quizplus · Accepted Answer

The payback period rule is a convenient and useful tool because it provides a quick estimate of how rapidly the initial investment will be recouped, and the results of a short payback rule decision will be quickly seen. Additionally, it does not have to take into account time value of money. Therefore, all of these statements are correct.

The Payback Period Rule Is a Convenient and Useful Tool