When evaluating a proposal by use of the cash payback method, if net cash flows exceed the capital investment within the time deemed acceptable by management, the proposal should be accepted.

Question

Quizplus · Accepted Answer

This is true, as the cash payback method measures the amount of time it takes for a project to generate enough cash flows to recover the initial investment. If the net cash flows exceed the capital investment within the acceptable time frame as determined by management, the proposal is considered acceptable for investment.

When Evaluating a Proposal by Use of the Cash Payback