Advantages from using the payback method when capital budgeting include
A)is useful when future cash flows in later years are uncertain.
B)promotes long-term projects.
C)neglects the time value of money.
D)emphasizes short-term projects.
E)considers only cash flows during the payback period.

Question

Quizplus · Accepted Answer

The payback method is advantageous when future cash flows in later years are uncertain because it focuses on recovering the initial investment quickly, reducing the risk associated with uncertain future cash flows.

Advantages from Using the Payback Method When Capital Budgeting Include