Which of the following statement about the payback period method for capital budgeting decisions is not correct? The payback period method ignores the time value of money. A shorter payback period does not always mean that one investment is more desirable than another. When the annual net cash inflow is the same each year, the payback period = Investment required/Annual net cash inflow. When the net cash flows change from year to year, the payback period = Investment required/Average net cash inflow per year.

Which of the following statement about the payback period method for capital budgeting decisions is not correct? The payback period method ignores the time value of money. A shorter payback period does not always mean that one investment is more desirable than another. When the annual net cash inflow is the same each year, the payback period = Investment required/Annual net cash inflow. When the net cash flows change from year to year, the payback period = Investment required/Average net cash inflow per year.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 4QTD

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