One advantage of the payback method of project analysis is the method's:
A)application of a discount rate to each separate cash flow.
B)bias towards liquidity.
C)difficulty of use.
D)arbitrary cutoff point.
E)consideration of all relevant cash flows.

Question

Quizplus · Accepted Answer

The payback method is biased towards liquidity because it emphasizes the speed at which the initial investment is recovered, favoring projects that return cash quickly.

One Advantage of the Payback Method of Project Analysis Is