Generally speaking the payback method for selecting investments should not be used because? A. it ignores...
Generally speaking the payback method for selecting investments should not be used because?
A. it ignores the time value of money
B. it ignores all cash flows after the payback period
C. it is just too simple to be used by smart people like ourselves
D. A and B above
Homework Answers
The correct option is:
D. A and B above
Unlike the discounted payback method;the payback method does not consider the time value of money.Also;the payback method considers cash flows only till the initial investment is recovered.
Add Answer to:
Generally speaking the payback method for selecting investments
should not be used because?
A. it ignores...
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.
The Cash Payback Method of Capital Investment Analysis has both positive and negative aspects. Which is...
The Cash Payback Method of Capital Investment Analysis has both positive and negative aspects. Which is not one of them? It is simple to use It analyzes cashflows It ignores cashflows after the payback period It limits the time used to determine cash paybacks
The conventional payback period ignores the time value of money, and this concems Blue Hamster's CFO....
The conventional payback period ignores the time value of money, and this concems Blue Hamster's CFO. He has now asked you to compute Delta's discounted payback period, assuming the company has a 10% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For full credit, complete the entire table. (Note: If your answer is negative, be sure...
The conventional payback period ignores the time value of money, and this concerns Blue Hamster's CFO. He has now a...
The conventional payback period ignores the time value of money, and this concerns Blue Hamster's CFO. He has now asked you to compute Delta's discounted payback period, assuming the company has a 8% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to the nearest two decimal places. For full credit, complete the entire table. Year 0 -5,500,000 Year 1 $2,200,000...
The payback method helps ms establish and identify a maximum acceptable payback period that helps in...
The payback method helps ms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the payback method the convention payback method and the discounted payback method Consider the following case Green Caterpillar Garden Supplies Inc. is a small tim, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Omega's perted future cash flows. To answer this question...
[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.
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback...
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Green Caterpillar Garden Supplies Inc.: Green Caterpillar Garden Supplies Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Alpha’s expected future cash flows. To answer this question, Green Caterpillar’s CFO has asked that you...
The conventional payback period ignores the time value of money, and this concems Blue Hamster's CFO. He has now asked...
The conventional payback period ignores the time value of money, and this concems Blue Hamster's CFO. He has now asked you to compute Delta's discounted payback period, assuming the company has a 10% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For full credit, complete the entire table. (Note: If your answer is negative, be sure...
Which of the following statements is CORRECT? The internal rate of return method (IRR) is generally...
Which of the following statements is CORRECT? The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The net present value method (NPV) is generally regarded by academics...
4. The payback period The payback method helps firms establish and identify a maximum acceptable payback...
4. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Beta's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you...
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.
The conventional payback period ignores the time value of money, and this concems Blue Hamster's CFO. He has now asked you to compute Delta's discounted payback period, assuming the company has a 10% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For full credit, complete the entire table. (Note: If your answer is negative, be sure...
The conventional payback period ignores the time value of money, and this concerns Blue Hamster's CFO. He has now asked you to compute Delta's discounted payback period, assuming the company has a 8% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to the nearest two decimal places. For full credit, complete the entire table. Year 0 -5,500,000 Year 1 $2,200,000...
The payback method helps ms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the payback method the convention payback method and the discounted payback method Consider the following case Green Caterpillar Garden Supplies Inc. is a small tim, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Omega's perted future cash flows. To answer this question...
[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 conventional payback period ignores the time value of money, and this concems Blue Hamster's CFO. He has now asked you to compute Delta's discounted payback period, assuming the company has a 10% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For full credit, complete the entire table. (Note: If your answer is negative, be sure...
Which of the following statements is CORRECT? The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The net present value method (NPV) is generally regarded by academics...
4. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Beta's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you...
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