What Are the Two Primary Drawbacks to the Payback Period

question 42

Multiple Choice

What are the two primary drawbacks to the payback period method?

• A)Difficult to calculate; ignores time value of money
• B)Difficult to calculate; only works for long projects (e.g., 5 years or more)
• C)Ignores time value of money; ignores cash flows after payback is reached
• D)Only works for long projects; ignores cash flows after payback is reached
• E)Difficult to calculate; ignores cash flows after payback is reached

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a part of the brain involved in the formation of new memories and is associated with learning and emotions.

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The risk of confirming negative stereotypes about one's group, which can have a detrimental effect on performance and behavior.