The payback and accounting rate of return (ARR)methods are suitable for investments with a relatively short time span.

Question

Quizplus · Accepted Answer

Both the payback and accounting rate of return (ARR) methods consider cash inflows and outflows over a shorter period of time, usually within a few years, making them more suitable for investments with a shorter time span. For investments with a longer time span, methods such as net present value (NPV) and internal rate of return (IRR) are more appropriate.

The Payback and Accounting Rate of Return (ARR)methods Are Suitable