One advantage of the payback period method is that it provides a rough measure of a project's liquidity and risk.

Question

Quizplus · Accepted Answer

The payback period method considers the time it takes for a project to recoup its initial investment, which can provide insight into its liquidity and risk. A shorter payback period indicates greater liquidity and lower risk, while a longer payback period may indicate a riskier investment. Therefore, the statement is true.

One Advantage of the Payback Period Method Is That It