Discounted payback's primary advantage over traditional payback is that
A) discounted payback considers cash flows that occur after the discounted payback period.
B) discounted payback is always shorter than traditional payback making more projects acceptable.
C) discounted payback does consider the time value of money.
D) discounted payback will let you accept projects whose discounted payback period is longer than the useful of the project.
E) all of the above are true.

Question

Quizplus · Accepted Answer

Discounted payback considers the time value of money by using discounted cash flows, whereas traditional payback does not. This makes discounted payback a better measure of a project's profitability, allowing for more accurate decision-making. Options A, B, and D are not accurate statements about the advantages of discounted payback.

Discounted Payback's Primary Advantage Over Traditional Payback Is That