Which of the following capital budgeting analysis methods may not use all possible cash flows in its calculations?

Question

Quizplus · Accepted Answer

The payback method only considers the initial investment and the cash inflows received up to the point where the initial investment is recovered. It does not take into account the cash flows beyond the payback period, so it may not use all possible cash flows in its calculations. NPV and IRR, on the other hand, consider all cash flows over the entire life of the project.

Which of the Following Capital Budgeting Analysis Methods May Not