Asked by Abylay Tastanbekov on May 07, 2024
Verified
The cash payback method is frequently used as a screening tool but it does not take into consideration the profitability of a project.
Cash Payback Method
A capital budgeting technique that estimates the time required to recoup the initial investment through cash flows.
- Gain insight into the methods and significance of capital budgeting for investment decision processes.
Verified Answer
EM
Esmeralda MartinezMay 13, 2024
Final Answer :
True
Explanation :
The cash payback method only considers the amount of time it takes to recover the initial investment, and does not account for the future cash flows and profitability of the project.
Learning Objectives
- Gain insight into the methods and significance of capital budgeting for investment decision processes.