A significant deficiency of the payback method of analyzing alternatives is the failure to account for the time value of money.

Name: A significant deficiency of the payback method of analyzing alternatives is the failure to account for the time value of money.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The payback method only considers the payback period and does not consider the time value of money, such as inflation or the earning potential of funds over time, which can affect the value of the investment in the future.

A Significant Deficiency of the Payback Method of Analyzing Alternatives