A major disadvantage of the payback period method is it
A)Is useless as a risk indicator.
B)Ignores cash flows beyond the payback period.
C)Does not directly account for the time value of money.
D)All of the above are correct.
E)Only answers b and c are correct.

Question

Quizplus · Accepted Answer

The payback period method ignores cash flows beyond the payback period and does not account for the time value of money, making options B and C correct.

A Major Disadvantage of the Payback Period Method Is It