Which of the following is a strength of payback period?
A) a disregard for cash flows after the payback period
B) only an implicit consideration of the timing of cash flows
C) merely a subjectively determined number
D) a measure of risk exposure

Question

Quizplus · Accepted Answer

Payback period is a measure of risk exposure because it indicates how quickly an investment will recoup its initial cost. The shorter the payback period, the lower the risk of the investment.

Which of the Following Is a Strength of Payback Period