Since the payback method is less sophisticated than other evaluation techniques it is obsolete. What are...
Since the payback method is less sophisticated than other evaluation techniques it is obsolete. What are the primary benefits?
Homework Answers
There are various kinds of evaluation techniques which are helpful in considering between two or more projects/investments. One of these techniques is a payback method, which is now considered less sophisticated then other evaluation techniques. It is also considered as obsolete, but rather than this there are certain primary benefits of Payback method.
These are as follows :
- This method provides the information about the time required to recover the cost of investment.
- It is helpful in considering a choice between the time based projects.
- It also provides information about the playback required to reach the break-even point.
- This method considered annual cash inflows.
- This method does not consider the time value of money.
Add Answer to:
Since the payback method is less sophisticated than other
evaluation techniques it is obsolete. What are...
what are two types of chromatographic techniques other than paper chromatography ?
what are two types of chromatographic techniques other than paper chromatography ?
Compare and contrast the four most common capital budgeting techniques: NPV, IRR, Payback, and Ac...
Compare and contrast the four most common capital budgeting techniques: NPV, IRR, Payback, and Accounting Rate of Return. What are the strengths and weaknesses of each when used as the sole investment criterion? Why do most companies use more than one method when evaluating projects? Identify several non quantitative factors that are apt to play a decisive role in the final selection of projects for capital expenditures.
1. Suppose a project has conventional cash flows. (a) If it has a payback less than...
1. Suppose a project has conventional cash flows. (a) If it has a payback less than the project's life, can you definitely state the alge- braic sign of the NPV? Why or why not? (b) If it has a positive NPV, what do you know about its payback? Its IRR? Give some examples, if you have multiple answers.
Net present value: is the best method of analyzing mutually exclusive projects. is less useful than...
Net present value: is the best method of analyzing mutually exclusive projects. is less useful than the internal rate of return when comparing different sized projects. is the easiest method of evaluation for non-financial managers to use. is less useful than the profitability index when comparing mutually exclusive projects. is very similar in its methodology to the average accounting return.
Are there any other spectroscopic techniques, other than UV-Visible spectroscopy, which might be able to distinguish...
Are there any other spectroscopic techniques, other than UV-Visible spectroscopy, which might be able to distinguish between the cis- and trans-[Co(en)2Cl2]Cl diastereomers? For example, IR or 1H nmr? For those techniques, explain what you might expect to observe that would or would not assist you in assigned the stereo-chemistry of the green and violet isomers.
Respondents are asked to score how frequently they use the different capital budgeting techniques on a...
Respondents are asked to score how frequently they use the different capital budgeting techniques on a scale of 0 to 4 (0 meaning "never", 4 meaning "always"). In many respects, the results differ from previous surveys, perhaps because we have a more diverse sample. An important caveat here, and throughout the survey, is that the response represents beliefs. We have no way of verifying that the beliefs coincide with actions. Most respondents select net present value and internal rate of...
Why is the discounted cash flow method for capital budgeting decisions considered better than other methods?...
Why is the discounted cash flow method for capital budgeting decisions considered better than other methods? Can the payback method be helpful when choosing among investment alternatives? If so, explain how
What is the discounted payback period of a project whose profitability index is higher than 1?...
What is the discounted payback period of a project whose profitability index is higher than 1? A)Greater than the project lifetime B)Not enough information to answer the question C)Less than the project lifetime D)Equal to the project lifetime
The IRR evaluation method assumes that cash flows from the project are reinvested at the same...
The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project's IRR. Consider the following situation: Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $2,750,000. The project's expected cash flows are: Year Year 1...
Contains ncrease Correct Answers for: D Evaluation Method Correct Answer Case Sensitivity Exact Match less ion...
Contains ncrease Correct Answers for: D Evaluation Method Correct Answer Case Sensitivity Exact Match less ion 2 1 out of 2 points You are the bank's liquidity manager. What should you do if the yield on non-liquid assets increases and why? Answer this question by filling in the blanks. Please use the suitable word provided in the round brackets The risk of iliquidity [A] (increased/decreased/did not change) The cost of illiquidity [B] (increased/decreased/did not chande Diemetbre tmaks nso e maintan...
1. Suppose a project has conventional cash flows. (a) If it has a payback less than the project's life, can you definitely state the alge- braic sign of the NPV? Why or why not? (b) If it has a positive NPV, what do you know about its payback? Its IRR? Give some examples, if you have multiple answers.
The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project's IRR. Consider the following situation: Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $2,750,000. The project's expected cash flows are: Year Year 1...
Contains ncrease Correct Answers for: D Evaluation Method Correct Answer Case Sensitivity Exact Match less ion 2 1 out of 2 points You are the bank's liquidity manager. What should you do if the yield on non-liquid assets increases and why? Answer this question by filling in the blanks. Please use the suitable word provided in the round brackets The risk of iliquidity [A] (increased/decreased/did not change) The cost of illiquidity [B] (increased/decreased/did not chande Diemetbre tmaks nso e maintan...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago