Which of the Following Is NOT a Strength of the Payback

question 46

Multiple Choice

Which of the following is NOT a strength of the payback method of capital budgeting?

• A)The payback values are relatively simple to calculate.
• B)When comparing projects the payback method decision is intuitive.
• C)The payback method uses all project cash flows in establishing the project payback period.
• D)It is a quick measure of the inherent risk of a project.

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Definitions:

Strategic Planning Pitfall

Common traps or mistakes made during the strategic planning process that can hinder an organization's success.

Strategic Leadership

The ability to influence others to voluntarily make decisions that enhance the prospects for the organisation's long-term success.

Incrementalism

A policy or decision-making process based on making small changes or adjustments, rather than large leaps, to gradually reach a desired outcome.

Strategic Planning

The process of defining an organization's direction and making decisions on allocating its resources to pursue this strategy.