Which of the Following Is Not an Advantage of the Payback

question 17

Short Answer

Which of the following is not an advantage of the payback method? a. It focuses on a project's downside risk.
B) It takes into account the time value of money.
C) It is easy to compute.
D) It is easy to understand.
E) All of the above are advantages of the payback method.

---

Definitions:

Salvage Value

The estimated residual value of an asset at the end of its useful life, important for calculating depreciation.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows or to evaluate the attractiveness of an investment.

Incremental Cost Approach

A decision-making process that focuses on the changes in total cost resulting from a specific business decision, considering only the relevant costs and benefits that differ between alternatives.

Operating Costs

Expenses associated with running a business's core activities on a day-to-day basis, such as salaries, rent, and utilities.