Which of the Following Is a Disadvantage of the Payback

question 60

Short Answer

Which of the following is a disadvantage of the payback method? a. It overvalues the initial outlay.
B) It undervalues the initial outlay.
C) It overvalues future cash inflows.
D) It undervalues future cash inflows.
E) It is easy to compute but difficult to understand.

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Definitions:

Strategic Planning

The process of defining a business's strategy or direction and making decisions on allocating its resources to pursue this strategy.

Strategic Planning

The process of defining a company's direction and making decisions on allocating resources to pursue this direction.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and profits without needing to increase its financial leverage.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and earnings without resorting to external financing.