The payback period and the accounting rate of return ignore are two methods of evaluating capital budgeting decisions.Like other approaches,these two methods have advantages and disadvantages.

Required:

a. What is an advantage of these two methods?

b. List two disadvantages of the payback period and explain how to calculate the payback period.

c. List two advantages and two disadvantages of the accounting rate of return and explain how to calculate the return.

Question

The payback period and the accounting rate of return ignore are two methods of evaluating capital budgeting decisions.Like other approaches,these two methods have advantages and disadvantages.

Required:

a.	What is an advantage of these two methods?

b.	List two disadvantages of the payback period and explain how to calculate the payback period.

c.	List two advantages and two disadvantages of the accounting rate of return and explain how to calculate the return.

Quizplus · Accepted Answer

The Answer of The payback period and the accounting rate of return ignore are two methods of evaluating capital budgeting decisions.Like other approaches,these two methods have advantages and disadvantages.

Required:

a.	What is an advantage of these two methods?

b.	List two disadvantages of the payback period and explain how to calculate the payback period.

c.	List two advantages and two disadvantages of the accounting rate of return and explain how to calculate the return.

The Payback Period and the Accounting Rate of Return Ignore