Payback period is the time in which the initial cost of an investment is expected to be recovered through the cash inflows generated by the investment. Briefly discuss the pros and cons of payback period?
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- What is the equation to calculate the payback period?The expected period of time that will elapse between the date of a capital investment and thecomplete recovery of the amount of cash investedis called: A.The average rate of return period B.The cash payback period C.The net present value period D.The internal rate of return periodWhat determines the anticipated interest rate payout for an investment?
- The payback method measures: The profitability of an investment. The net cash inflow from an investment. The economic life of an investment. How rapidly the investment is recovered. The investment’s true rate of return.What is the simple payback period? What is the net present value of the investment? What is the modified internal rate of return for the investment?Which approach to investment analysis is "best" in terms of accounting for both the timing and amount of revenue streams from a potential investment? A. the payback period B. the simple rate of return C. the net present value D. the internal rate of return
- The length of time required for an investment to generate cash flows sufficient to recover its initial cost is the: O net present value internal rate of return payback period profitability index discounted payback periodWhich of the following methods consider the time value of money? A. payback and accounting rate of return B. payback and internal rate of return C. internal rate of return and accounting rate of return D. internal rate of return and net present valueThe present value of an investment's future cash flows divided by its initial cost is the: O Net present value. O Internal rate of return. O Average accounting return. O Profitability index. O Payback period.
- The most accurate way to analyze the profitability of an investment is to compute the payback period. A. True B. FalseHow do you evaluate an asset whose value is dependent on future cash flow expectations?Which of the following methods of capital budgeting tries to equate the present value of cash inflows to present value of cash outflows? a. Net present value b. Payback period c. Internal rate of return d. Accounting Rate of return
