One of the Key Advantages of Using "Payback" as a Method

question 25

True/False

One of the key advantages of using "payback" as a method of investment appraisal is that it considers cash flows after the initial investment has been paid back

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Definitions:

Rate of Return on Total Assets

A financial ratio that shows how effectively a company uses its assets to generate profit, calculated as net income divided by total assets.

Total Assets

The sum of all resources owned by a company, measurable in monetary terms, and listed on the balance sheet.

Net Income

The amount of earnings remaining after all expenses, including taxes and interest, have been deducted from total revenue; also known as net profit.

Interest Expense

The expense a business or individual faces for using borrowed capital during a certain timeframe.