Which of the following methods of project analysis are biased towards short-term projects?
I.internal rate of return
II.accounting rate of return
III.payback
IV.discounted payback
A)I and II only
B)III and IV only
C)II and III only
D)I and IV only
E)II and IV only

Question

Quizplus · Accepted Answer

Payback and discounted payback are biased towards short-term projects as they only consider the time it takes to recoup the initial investment, without considering the time value of money. Internal rate of return and accounting rate of return take into consideration the time value of money and can be used for both short-term and long-term projects.

Which of the Following Methods of Project Analysis Are Biased