One Criticism of the Payback Method Is That It Ignores

question 22

True/False

One criticism of the payback method is that it ignores cash flows that occur after the payback point has been reached

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Definitions:

Retained Earnings

The portion of a company's profits that is kept or retained for reinvestment or to pay debt, rather than being paid out as dividends to shareholders.

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders, but not retired, and may resell in the future.

Cash

Money in the form of coins or banknotes, especially that issued by a government, and available for immediate use in transaction.

Par Value

The nominal or face value of a bond, stock, or other financial instrument, as stated by the issuer.