The Disadvantages of the Payback Approach Include

question 74

Multiple Choice

The disadvantages of the payback approach include:

• A) cash flows after the payback period are ignored in the calculation
• B) payback ignores the time value of money
• C) payback fails to provide an objective decision-making criterion
• D) all of the above

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Definitions:

Average

A statistical measure that determines the central tendency of a set of numbers by dividing the sum of all numbers by the count of the numbers.

Outliers

Those scores in a distribution that are noticeably much more extreme than the majority of scores. Whether a score is an outlier or not is usually an arbitrary decision made by the researcher.

Percentile

A measure indicating the value below which a given percentage of observations in a group of observations falls.

Very High

A term often used in statistics and research to describe data points or values that are significantly above the average or expected range.