Which of the Following Is a Disadvantage of Payback Period

question 92

Multiple Choice

Which of the following is a disadvantage of payback period approach?

• A) It does not examine the size of the initial outlay.
• B) It does not use net profits as a measure of return.
• C) It does not explicitly consider the time value of money.
• D) It does not take into account an unconventional cash flow pattern.

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Definitions:

Profitable

Having a financial gain or beneficial outcome, especially after all expenses have been deducted.

Market Segments

Distinct groups of consumers within a market who share similar needs, desires, and characteristics, allowing for targeted marketing strategies.

Behavioral Segmentation Variable

Criteria used in market segmentation based on patterns of consumer behavior, such as purchasing habits or brand interactions, to tailor marketing strategies.

Age

A measure of the length of time that a person has lived or a thing has existed, often used as a variable in demographics and market segmentation.