Which of the following features is characteristic of a payback period?
A) uses discounting
B) ignores cash flows beyond the payback period
C) equivalent to net present value
D) considers time value of money

Question

Quizplus · Accepted Answer

The payback period is a method of evaluating the time it takes for an investment to recoup its initial cost through cash inflows. It does not use discounting and ignores cash flows beyond the payback period. It is not equivalent to net present value and does not consider the time value of money.

Which of the Following Features Is Characteristic of a Payback