- This topic has 6 replies, 6 voices, and was last updated Jan-1812:10 am by
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Up0
The payback period approach is inappropriate for all but which of the following reasons?
- Time value of money is ignored.
- Cash flows after the payback period are ignored.
- The payback approach will always endorse the wrong project.
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Up4
Ah crap, reading critically is key!!
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Up3
I like questions like these. Question wording is equally tricky no matter what the levels so always good to have a bit of practice on this.
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Up3
The payback period often does support the best
project. The metric is flawed for the other two reasons (and more), so it doesn’t always give the best results. -
Up2
I’m with you on that one mate. Had to read it 3 times before I went with an answer.
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Up2
Boo! I got it wrong. :neutral_face:
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Up1
“inappropriate for all but which of the following reasons” – was well confused by that one!
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