Which of the following is a true statement about the use of the payback period technique in capital budgeting?

Question

Quizplus · Accepted Answer

The payback period technique is simple to use and understand because it calculates the time required to recover the initial investment in a project by considering the expected cash flows. However, it does not consider the time value of money, making it less accurate for long-term projects. Additionally, it does not appraise risk, making it difficult to determine the riskiness of a project. Lastly, while it does measure how quickly an investment will be recovered, it cannot be used to measure liquidity.

Which of the Following Is a True Statement About the Use