Using the Payback Method to Evaluate Capital Projects Is a Simpler

question 158

Essay

Using the payback method to evaluate capital projects is a simpler method than either net present value or internal rate of return.ans the following questions relating to the payback method.
a.What does the payback period measure?
b.How is the payback period calculated when the annual cash flows are equal?
c.How is the payback period calculated when the annual cash flows are not equal?

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Definitions:

Cleavage

The tendency of a mineral to break along flat surfaces as determined by the mineral's crystal structure.

Silicate Mineral

Minerals that contain silicon and oxygen, and sometimes other elements, which make up the majority of the Earth's crust.

Known Minerals

Refers to substances with a definite chemical composition and crystalline structure that have been identified and cataloged by scientists.

Silicon Tetrahedron

A fundamental structural unit in silicate minerals, consisting of four oxygen atoms symmetrically arranged around a central silicon atom.