The Payback Method Has Several Disadvantages, Among Them

question 24

Multiple Choice

The payback method has several disadvantages, among them:

• A)Payback fails to choose the optimum or most economic solution to a capital budgeting problem.
• B)Payback ignores cash inflows after the payback period.
• C)Payback fails to choose the optimum or most economic solution to a capital budgeting problem, and it ignores cash inflows after the payback period.
• D)None of these options

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Definitions:

Continuing Improvement

An ongoing effort to enhance products, services, or processes through incremental and breakthrough improvements.

Small-Batch Production

Manufactures a variety of products crafted to fit customer specifications.

Better Ways

Innovative or more effective methods and practices that improve processes or outcomes.

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Is the process of managing productive systems that transform resources into finished products or services.