The payback method of analysis ignores time value of money
D. Time Value of Money
Question 1 (1 point) The payback method of analysis ignores which one of the following? O...
Which one of the following methods of analysis ignores the time value of money? Net present value Internal rate of return Discounted cash flow analysis Payback Profitability index
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.
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 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...
11. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the payback method: the conventional payback method and the discounted payback method. Consider the following case: Fuzzy Button Clothing Company 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...
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...
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 payback method helps firms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the payback method: the conventional payback method and the discounted payback method. Consider the following case: Fuzzy Button Clothing Company 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 Delta's expected future cash flows. To answer this question, Fuzzy...
[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.
7. The payback period Aa Aa 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 Omega's expected future cash flows. To answer this question, Green Caterpillar's CFO has asked...