One advantage of the payback method of project analysis is the method's application of a discount...
One advantage of the payback method of project analysis is the method's
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application of a discount rate to each separate cash flow.
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simplicity.
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difficulty of use.
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arbitrary cutoff point.
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consideration of all relevant cash flows.
Homework Answers
Under Payback method calculates the time period taken to recover the initial investment.
It is calculated as Initial Investment/Cash flows
in case the cash flows are equal
It does not consider cash flows arising after the payback is completed and it does not take into account discounting. But the method is very simple to uise.
Hence, the answer is SIMPLICITY
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One advantage of the payback method of project analysis is the
method's
application of a discount...
The payback method of analysis ignores which one of the following? 1. Time value of money...
The payback method of analysis ignores which one of the following? 1. Time value of money 2. Arbitrary cutoff point 3. Cash flow direction 4. Timing of each cash inflow 5. Initial cost of an investment
Question 1 (1 point) The payback method of analysis ignores which one of the following? O...
Question 1 (1 point) The payback method of analysis ignores which one of the following? O 1) Cash flow direction 2) Timing of each cash inflow 3) Arbitrary cutoff point 4) Time value of money 5) Initial cost of an investment
[Select all relevant.] Deficiencies of the simple (undiscounted) payback period method include: o disregard for cash...
[Select all relevant.] Deficiencies of the simple (undiscounted) payback period method include: o disregard for cash outflows. Onone of these. Payback is the best capital budgeting method of all. disregard for the time value of money. O an arbitrary cutoff date, with no economic basis. disregard for cash flows after the payback period.
Which of the following is an advantage of the cash payback method? a. It takes into...
Which of the following is an advantage of the cash payback method? a. It takes into consideration the time value of money. b. It emphasizes accounting income. c. It is easy to use. d. It includes the cash flow over the entire life of the proposal.
The payback method of analysis: O has a timing bias. o considers all project cash flows....
The payback method of analysis: O has a timing bias. o considers all project cash flows. O ignores the initial cost. O applies an industry-standard recoupment period. O discounts cash flows.
Discounted payback period. Becker, Inc. uses the discounted payback period for projects costing less than $25,000 and h...
Discounted payback period. Becker, Inc. uses the discounted payback period for projects costing less than $25,000 and has a cutoff period of four years for these small-value projects. Two projects, R and S, in the following table, PE, are under consideration. Their anticipated cash flows are listed in the following table. If Becker uses a discount rate of 4% on these projects, are they accepted or rejected? If it uses a discount rate of 8%? A discount rate of 18%?...
Which one of these statements related to discounted payback is correct? Multiple Choice Payback is a...
Which one of these statements related to discounted payback is correct? Multiple Choice Payback is a better method of analysis than discounted payback. Discounted payback is used more frequently in business than payback. Discounted payback does not require a cutoff point. Discounted payback is biased towards short-term projects The discounted payback period increases as the discount rate decreases.
Which of the statements below are true for the payback method of evaluating projects? ' The...
Which of the statements below are true for the payback method of evaluating projects? ' The payback method ignores the time value of money. O The payback method considers all of the project cash flows. O The payback method uses an arbitrary all of the above. Two of the above.
Discounted payback period. Becker, Inc. uses the discounted payback period for projects costing less than $25,000...
Discounted payback period. Becker, Inc. uses the discounted payback period for projects costing less than $25,000 and has a cutoff period of four years for these small-value projects. Two projects, R and S, in the following table, B are under consideration. Their anticipated cash flows are listed in the following table. If Becker uses a discount rate of 6% on these projects, are they accepted or rejected? If it uses a discount rate of 12%? A discount rate of 18%?...
20. A project has a required payback period of three years. Which one of the following...
20. A project has a required payback period of three years. Which one of the following statements is correct concerning the payback analysis of this project? A) The cash flows in each of the three years must exceed one-third of the project's initial cost if the project is to be accepted. B) The cash flow in Year 3 is ignored. C) The project's cash flow in Year 3 is discounted by a factor of (1 + R)3 D) The cash...
Question 1 (1 point) The payback method of analysis ignores which one of the following? O 1) Cash flow direction 2) Timing of each cash inflow 3) Arbitrary cutoff point 4) Time value of money 5) Initial cost of an investment
[Select all relevant.] Deficiencies of the simple (undiscounted) payback period method include: o disregard for cash outflows. Onone of these. Payback is the best capital budgeting method of all. disregard for the time value of money. O an arbitrary cutoff date, with no economic basis. disregard for cash flows after the payback period.
The payback method of analysis: O has a timing bias. o considers all project cash flows. O ignores the initial cost. O applies an industry-standard recoupment period. O discounts cash flows.
Discounted payback period. Becker, Inc. uses the discounted payback period for projects costing less than $25,000 and has a cutoff period of four years for these small-value projects. Two projects, R and S, in the following table, PE, are under consideration. Their anticipated cash flows are listed in the following table. If Becker uses a discount rate of 4% on these projects, are they accepted or rejected? If it uses a discount rate of 8%? A discount rate of 18%?...
Which one of these statements related to discounted payback is correct? Multiple Choice Payback is a better method of analysis than discounted payback. Discounted payback is used more frequently in business than payback. Discounted payback does not require a cutoff point. Discounted payback is biased towards short-term projects The discounted payback period increases as the discount rate decreases.
Which of the statements below are true for the payback method of evaluating projects? ' The payback method ignores the time value of money. O The payback method considers all of the project cash flows. O The payback method uses an arbitrary all of the above. Two of the above.
Discounted payback period. Becker, Inc. uses the discounted payback period for projects costing less than $25,000 and has a cutoff period of four years for these small-value projects. Two projects, R and S, in the following table, B are under consideration. Their anticipated cash flows are listed in the following table. If Becker uses a discount rate of 6% on these projects, are they accepted or rejected? If it uses a discount rate of 12%? A discount rate of 18%?...
20. A project has a required payback period of three years. Which one of the following statements is correct concerning the payback analysis of this project? A) The cash flows in each of the three years must exceed one-third of the project's initial cost if the project is to be accepted. B) The cash flow in Year 3 is ignored. C) The project's cash flow in Year 3 is discounted by a factor of (1 + R)3 D) The cash...
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