The payback method ignores cash flows after the payback period,whereas the accounting rate of return includes them.

Name: The payback method ignores cash flows after the payback period,whereas the accounting rate of return includes them.
Brand: Quizplus
Rating: 5.0 (62 reviews)

Question

Quizplus · Accepted Answer

The payback method only considers the time it takes to recover the initial investment, ignoring any cash flows that occur after this period. In contrast, the accounting rate of return considers the entire life of the project, including all cash flows.

The Payback Method Ignores Cash Flows After the Payback Period,whereas