When evaluating capital budgeting decision models,the payback period emphasizes:

Question

Quizplus · Accepted Answer

The payback period is a measure of liquidity, as it focuses on the amount of time required to recover the initial investment in a project. It does not take into account profitability or cost of capital, and it is calculated as the length of time it takes for the project's cash inflows to equal or exceed its initial investment. Therefore, the best choice is A.

When Evaluating Capital Budgeting Decision Models,the Payback Period Emphasizes