Asked by Eleanna Koutsouveli on Jun 22, 2024
Verified
The advantages of the payback method of project analysis include the bias towards arbitrary cutoff point.
Payback Method
An investment appraisal technique that calculates the time required to recoup the cost of an investment.
Project Analysis
The process of evaluating the viability, profitability, and risks associated with a proposed project before proceeding.
Arbitrary Cutoff Point
A subjective point or threshold determined without any criteria based on clear or objective reasons, often used in decision-making processes that lack a clear rationale.
- Learn about the favorable and unfavorable elements of the payback method in project investigation.
Verified Answer
Learning Objectives
- Learn about the favorable and unfavorable elements of the payback method in project investigation.
Related questions
A Project Requires an Initial Outlay of $100,000, and Is ...
What Are the Two Primary Drawbacks to the Payback Period ...
Although NPV Is the Best Capital Budgeting Technique, Most Executives ...
A 50- Year Project Has a Cost of $500,000 and ...
The Payback Method The Payback Method Is a Popular Way ...