One of the disadvantages of the payback method is that it ignores cash flows beyond the payback period.

Name: One of the disadvantages of the payback method is that it ignores cash flows beyond the payback period.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The payback method only considers the cash inflows within the payback period, and does not take into account any cash flows after the payback period. This limitation can lead to projects being accepted that may not be profitable in the long run.

One of the Disadvantages of the Payback Method Is That