What are the two primary drawbacks to the payback period method?
A) Difficult to calculate; ignores time value of money
B) Difficult to calculate; only works for long projects (e.g., 5 years or more)
C) Ignores time value of money; ignores cash flows after payback is reached
D) Only works for long projects; ignores cash flows after payback is reached
E) Difficult to calculate; ignores cash flows after payback is reached
Correct Answer:
Verified
Q12: The internal rate of return (IRR)is simply
Q13: Which of the following is most correct?
A)Stand-alone
Q14: The money needed to get a project
Q15: Payback does not include the following in
Q16: Project A has a payback period of
Q18: Risk varies with project type, and the
Q19: Capital budgeting involves how companies spend:
A)day to
Q20: Mutually exclusive projects:
A)are usually different alternatives to
Q21: A project's NPV profile will cross the
Q22: IRR is:
A)guaranteed to give the right answer.
B)not
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