Three primary methods for determining the projected financial value of projects include net present value analysis,return on investment,and ____ analysis.
A) growth
B) payback
C) environmental impact
D) efficiency

Question

Quizplus · Accepted Answer

The best choice to complete the sentence is B) payback analysis. Payback analysis measures the amount of time it takes for the initial investment in the project to be paid back through the cash inflows generated by the project. It is a simple and easy-to-understand method of evaluating the financial value of a project, and therefore it is commonly used by many organizations. However, it does not take into account the time value of money, unlike methods such as the net present value analysis.

Three Primary Methods for Determining the Projected Financial Value of Projects