Which of the Following Is Not an Advantage of the Payback

question 58

Multiple Choice

Which of the following is not an advantage of the payback method of capital budgeting?

• A) It can be used to separate investments when other methods show similar returns.
• B) The sooner cash is recovered the sooner it can be reinvested.
• C) A quick payback period reduces the risk of the investment.
• D) It looks at returns over the whole life of the investment.

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