Which of the following is a reason for firms not using the payback method as a guideline in capital investment decisions?
A) It gives an explicit consideration to the timing of cash flows.
B) The optimal payback period cannot be specified in light of the wealth maximization goal.
C) It is a measure of risk exposure and projects the possibility of a calamity.
D) It is easy to calculate and has intuitive appeal.
Correct Answer:
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