Indicate whether each of the following statements is true or false.
1. The payback method does not take the time value of money into account.
2. The unadjusted rate of return indicates the length of time required to recover the initial cost of an investment.
3. The payback period can only be calculated for capital investments that are expected to provide equal annual cash inflows over their useful lives.
4. Generally, investments with shorter payback periods are preferred.
5. Use of the payback method to analyze capital investments is the best way of identifying the projects that will make the greatest contribution to a company's profits.

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The Answer of Indicate whether each of the following statements is true or false.
1. The payback method does not take the time value of money into account.
2. The unadjusted rate of return indicates the length of time required to recover the initial cost of an investment.
3. The payback period can only be calculated for capital investments that are expected to provide equal annual cash inflows over their useful lives.
4. Generally, investments with shorter payback periods are preferred.
5. Use of the payback method to analyze capital investments is the best way of identifying the projects that will make the greatest contribution to a company's profits.

Indicate Whether Each of the Following Statements Is True or False