Which of the following is a technique for evaluating capital projects that is particularly useful when firms face time constraints in repaying investors?
A) Payback
B) Internal rate of return
C) Net present value
D) Profitability index

Question

Quizplus · Accepted Answer

The payback method focuses on how quickly the initial investment can be recovered, making it particularly useful for evaluating projects under time constraints for repaying investors. It does not account for the time value of money or cash flows beyond the payback period, but it provides a simple measure of liquidity risk associated with a project.

Which of the Following Is a Technique for Evaluating Capital