One positive feature of the payback period is it emphasizes the earliest forecasted free cash flows,which are less uncertain than later cash flows and provide for the liquidity needs of the firm.

Question

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The statement is true. The payback period calculation focuses on the earliest forecasted free cash flows, which are typically more reliable and less uncertain than later cash flows. This can be beneficial for the firm's liquidity needs, as it emphasizes the ability to recover the initial investment quickly.

One Positive Feature of the Payback Period Is It Emphasizes