A disadvantage of the payback method is that it fails to include cash flows beyond the payback period.

Name: A disadvantage of the payback method is that it fails to include cash flows beyond the payback period.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The payback method only considers the amount of time it takes to recoup the initial investment, and does not take into account any cash flows that occur after the payback period, resulting in a limited perspective on long-term profitability.

A Disadvantage of the Payback Method Is That It Fails