A major disadvantage of the payback period method is that 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 answers 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 only options B and C correct.

A Major Disadvantage of the Payback Period Method Is That