When comparing the payback and discounted payback from a ﬁnancial point of view, the
discounted payback method is preferred over the payback method.

Question

Quizplus · Accepted Answer

The discounted payback method takes into account the time value of money and provides a more accurate measure of the profitability of an investment than the traditional payback method, which only considers the time it takes to recover the initial investment. Therefore, the discounted payback method is generally preferred over the payback method from a financial point of view.

When Comparing the Payback and Discounted Payback from a ﬁNancial